TelexFree flooded with fake VOIP customers?
No doubt as a result of the TelexFree narrative taking on a life of its own these last few weeks, ironically due to a complete lack of communication by the company itself, yesterday saw the release of two official TelexFree corporate marketing videos.
Featuring Steve Labriola, TelexFree’s “Director of Business Development”, the two videos revealed little new information, but there were two interesting tidbits that I felt were worth going over.
The first was in relation to the SEC investigation. I’m regularly asked about the status of this investigation, but with neither connections inside the SEC or TelexFree, I’m only able to provide what is publicly known about the status of the investigation.
Yesterday Labriola revealed that
[5:49] A lot of people have asked me about Massachusetts, “what’s going on in Massachusetts?”
Well I’ll tell ya what. Massachusetts: We have sat down with authorities in Massachusetts, answered any questions that they have, presented all the documentation that they may need to look at… we are an open book for them.
The take-away from this is that the SEC investigation is not a dialogue between TelexFree and the agency. The SEC are investigating the company and requesting information from TelexFree that they need to complete the investigation.
As such, any changes to the compensation plan and/or TelexFree’s business practices are not reactionary, they’re anticipatory.
I suspect being formally investigated by the SEC has been somewhat of a wakeup call to TelexFree corporate, and now we’re seeing the taking of compliance more seriously, whereas before it was more of a joke.
In response to Brazilian Public Prosecutors filing a civial pyramid scheme lawsuit against the company, Carlos Costa, part-owner of TelexFree, declared “god used” him to create TelexFree and that “nobody will take it away” from him. That’s about as serious as TelexFree compliance got post SEC investigation.
Now TelexFree is hastily seeking to re-invent itself as a “customer acquisition company”, with Labriola revealing in his new video that
[00:56] Since March 9th, since our compensation plan has changed we have 550,000 new customers in USA alone.
And this brings us to the next point I want to address, TelexFree’s VOIP customers.
With alternatives such as Skype coming in at $13 a month, does anyone really think 550,000 schmucks materialized out of thin air to pay TelexFree $49.90 a month for an inferior service?
Hardly.
The compensation plan changes Labriola mentions have widely been panned by TelexFree’s passive investors, requiring them to
- have at least 5 VOIP accounts signed up under their primary affiliate account and
- personally recruit at least two TelexFree affiliates who in turn have at least 5 VOIP accounts signed up under them
TelexFree don’t care who signs up for or pays for these accounts, only that they exist so that Labriola can continue to quote impressive-sounding statistics.
The reality?
Shortly after TelexFree made their compensation change announcements, affiliates quickly cottoned on that unless the above requirements were met, they were effectively cut off from withdrawing the thousands of dollars they had previously invested.
Quick to spot an opportunity within an opportunity, it wasn’t long before third-party companies began to pop up to offer affiliates TelexFree VOIP customers for as little as “fifteen cents per VOIP account”.
One such company, TelexAutomation, advise on their website:
With Telex Automation you can create hundreds of VOIP accounts in less than 5 minutes!
We understand that your success is contingent upon hundreds of processes going just right.
Our team of developers ensures that you accounts are created quickly and with incredible accuracy.
TelexAutomation will automatically create VOIP accounts for each of your promoter accounts.
After creating the accounts you’ll receive an e-mail containing the usernames, passwords and invoice numbers for each account we created for you.
Placing an order can be done in 3 simple steps.
1) Create an account with us by clicking Get Started
2) Once you login to your account, you’ll tell us the promoters you want VOIP accounts created for
3) Last you’ll select how many VOIP accounts you want for each promoter, enter the customer details for the VOIP accounts (one time), enter your payment information and you’re done!
The entire process only takes a few minutes!
We only charge $0.15 (fifteen cents) per VOIP account. The minimum order is $3.00. If you are ordering less than 20 accounts you will be charged the order minimum of $3.00.
Previously TelexFree affiliates had to post ads to qualify for their ROIs, therefore prior to the new changes the money was in automated TelexFree spam publication services. Now that the plan has changed, it’s buying fake VOIP customers.
Despite featuring TelexFree logos prominently on their website, one can assume companies like TelexAutomation don’t have direct access to the TelexFree VOIP customer database. As such, they and every other VOIP customer selling company will be signing up fake customers through the front-end as required.
What information they are inputting into the system when they sign up the accounts in unclear, however by providing them on-demand, it’s clear TelexFree themselves are not verifying that any of the customers signing up with them actually exist.
This is somewhat curious considering the TelexFree “customer” sign-up page requires a “SSN or Tax ID” (123456789?).
But I digress, as long as that $49.90 fee is paid and Labriola gets his statistics, nobody over at TelexFree seems concerned about affiliates signing up fake VOIP customers for the sole purpose of withdrawing invested funds.
As for who’s running TelexAutomated, well there’s no information on the website indicating who’s running the company. However further research reveals that the owner of TelexAutomated appears to be operating out of Massachusetts, the very state the SEC are investigating TelexFree out of.
The TelexAutomated website domain was registered on the 22nd of March 2014, and lists a “Patrick Tarmey” as the owner with a supplied address in Massachusetts.
The email address Tarmey used to register the domain belongs to that of “Stronghold Airsoft”, whose website is hosted on the same server as that of TelexAutomation:
Stronghold Airsoft appears to be unrelated to TelexFree, operating a “toygun” based business (think a pellet version of paintball):
Stronghold Airsoft is a 25,000sqft indoor airsoft course in Abington, MA.
For those who are new to airsoft, these guns shoot 6mm round pellets commonly known as “BBs.” They travel at speeds much lower than real bullets and although a bit painful when hit by one of these pellets, they cannot kill someone nor cause heavy-bleeding injuries unlike real guns.
Even though airsoft is considered a toygun, safety precautions should still be taken into account when playing with these replicas.
Whether Patrick Tarmey is an affiliate of TelexFree or is connected to TelexFree corporate in any way is unclear.
In line with the recent switch over to TelexCredits from USD, the emergence of fake VOIP customers brings TelexFree ever-closer to Zeek Rewards. Shutdown by the SEC in 2012, Zeek Rewards required affiliates acquire penny auction customers to dump “VIP bids” they’d purchased onto.
As such a market for fake Zeek Rewards customers emerged, with affiliates paying third-party companies to create customers for them to dump their bids onto.
TelexFree is slightly different in that the customer accounts and purchases are bundled together (there’s nothing to give away), but the principle is the same. Thousands, if not hundreds of thousands of fake VOIP accounts are going to be created just so TelexFree affiliates can withdraw their invested funds.
TelexFree affiliates could of course just actually sell the VOIP accounts to legit customers but, in addition to being an unattractive prospect to the company’s largely passive investment orientated affiliate-base, they’re also “impossible to sell“.
Give it a month or two and if the SEC make a request for information on the TelexFree VOIP customer database, what they get back should be quite interesting.
this pozi scheme will suffer many poor and uneducated people in Cambodia that is poor country because of no heated leader that always promote it like crazy without ethic.
I hope SEC will do more action on Telefree and I hope leader of telexfree in Cambodia should stop promote it to high school students or young people cos it destroy their future.
You are rich enough and you have many program to play n business to run and money that you earn is from our poor country not Telexfree pls stop.
550,000 customers and 10,000,000 minutes that comes up to 18.18 minutes per VOIP account a month.
So these alleged Telexfree customers are paying $49.99 to use the service for an average of 18 minutes?
And let’s not forget how Zeek and their advocates reacted to NC AG’s demand for documents, eh? “It’s perfectly normal, they asked for some documents, we gave them the documents.”
A month or two later, SEC emergency freeze order hit.
Un
Be
Leeev
a
Bull.
There’s no doubt about that TelexFree has a lot of fake customers. Gerald Nehra clearly specified that people could be their own customers, but that the company needed SOME external customers to operate as a legitimate MLM – “preferrably minimum 20% external customers. We’re not there yet, but we’re moving in the right direction according to the data I have received”.
10:15 into the video – Gerald Nehra.
19:20 Customer to affiliate ratio.
youtube.com/watch?v=bGTnkg2-los
Retail purchase from yourself (showing all the details):
youtube.com/watch?v=2NJSJ7REa4c
Note that he suggests giving the fake customer account away for free as a marketing method, or sell it for a price. But a lot of people don’t like to sell or promote products, they will probably have trouble finding anyone interested.
Most customers are of that type. The other type are the promoters themselves, e.g. 1 VOIP subscription for 1 month was required to BECOME a promoter. People could disable the service after the first month by not paying the invoice, but they were probably still registered as customers.
@M_Norway
Where do you have this info that “1 VOIP subscription for 1 month was required to BECOME a promoter” from?
I’ve been a promoter for 7 months WITHOUT buying the VOIP or any other product that the company offers EVER!
i very upset with telexfree, change policy with old contact no mercy with poor family in the world.
every day we promote telexfree to our friend our family, and they all start to believed what we said, but now telexfree stop don’t allow use withdrew our money need to find 5 client and 2 promoter for qualify.
that talk very very very easy!!!!!!!! but telexfree make us very difficult with new compensation and try to kill old contact, how long to spend time for find 5 client and how long to train 2 promoter, 2month or 3 month,
no body believe what we talk anymore, now telexfree try force us to work for them like a slave kill new people or customer or promoter. the tue killing people business should be SEC they need more active on telexfree.
everyone can’t rune be cause telexfree keep all our money and die together when the time watch SEC big boom is start, 3 million people will die by Cool Killing SEC, is that real !!
i swear with people around the world will remember you SEC, and you USA, never nevernevernevernevernever for get what you act on us.
i will open my heart to listen the country hat you. if you do no mercy, how do you want get mercy when you time is coming.
Which country?
I got most of my information from US promoters between June 2013 and September 2013. I also got information from the back office training videos, and a few other similar sources.
$50 (1 VOIP subscription) was required as a registration fee to become a promoter. I have replied to several posts about how to disable the service (in mid 2013 to late 2013).
Did you pay a similar type of registration fee to become a promoter? To become a “partner”?
I have found ONE video source with poor sound, from something that looks like an official TelexFree signup video. Around 1 minute into the video is the $50 signup fee as a partner mentioned.
youtube.com/watch?v=lpR_n9k0CtI
Another video, better sound, around 1 minute into the video:
youtube.com/watch?v=HceckdB9qRg
The partner fee actually includes 1 month VOIP subscription (or it did include it when I checked details in 2013).
This is a truly Pyramid Scheme, hope SEC will closed down this company to avoid more victim,
1 minute into each video, “signup process”:
youtube.com/watch?v=lpR_n9k0CtI
youtube.com/watch?v=HceckdB9qRg
$50 to become a partner. That option included a 1 month VOIP subscription when I checked it in second half of 2013. I have posted the same information in another post, currently in moderation queue.
People could disable the VOIP service after the first month by not paying the invoice.
so.. with this strategy it looks like telexfree has just dug itself out of the hole…
this can really save the ass***** from closing down.. huh..
How much time until telexfree gets shutdown?
Can someone in TelexFoofee please tell him that lime green and grey is not a great color combination? What does he do, dress under dim lighting?
I have a question.
How can TelexAutomation offer a fake TelexFree VoIP account for just $0.15 if they cost $49.90 each?
liehappy is correct… you do not have a purchase a VoIP plan to be a promoter. This is where the pyramid begins.
If promoters were truly selling the VoIP plan, maybe there was a better chance of getting through by SEC. Nevertheless, I’ve purchased VoIP plans before that the cost is 49.90, but they give you back 44.90, which means for Promoters, it really costed 5.00 and we were selling these acct’s for 10 – 15 dollars, so we made some money on the side.
I actually gave 4 away (20 bucks) and never sold any.
@Darkbotic, TelxAutomation just creates the account, but doesn’t pay the invoice. If you have 50 VoIP accts to create, it can take you several hours to create, but these companies do it in an automation method (bot) and then they email you the acct names you selected and the passwords.
You will then need to go into your acct and type in the invoice and pay for it… basically, you’re paying someone to do the front-end, meaning you’re paying 0.15 more per acct to have it created for you.
@M_Norway, you are also correct.
The purchase of one VoIP comes when one enrolls. Basically, an add-on to whatever package you enroll under. If Ad Family $1375 + $50 (VoIP) = $1425, that’s how much I paid, but there will not be a need to purchase again.
I would like to thank the writers and contributors of this blog for their insight and for providing a perspective that I feel is based in reality although it is a tough pill to swallow for TF investors.
The internet, as well as this blog, has several perspectives from people whose lives have changed thanks to telex free (ie. early beneficiaries of this ponzi scheme). I would like to provide the perspective of a low end late investor about to get fucked over:
My wife joined TelexFree in Jan 2014 after being finally convinced by her sister. We heard things such as Telexfree is working with the World Cup in Brazil as the official provider, etc. This was before I discovered this blog.
Obviously we were attracted to the passive earning nature of the investment as well as the possibility of making uber money by recruiting others (including ourselves). We signed up 1 Adcentral family account for $1400 or so and eventually started getting our passive $100 weekly ROI in early Feb.
I immediately smelled the ponzi/pyramid scheme nature of this company (I learned something from watching episodes of American Greed on CNBC), but I wasn’t sure if my insight was correct plus our enthusiasm was too strong at the time to see clearly. But hey as long as we made our money back and then some just from the 1 minute daily effort to post ads then no harm done right?
From the getgo I had difficulty attracting others to this company because I am too straight forward a person (would never make it in sales). The only way I could think of describing this company to others is a ponzi scheme whose product I know and care nothing about that will collapse, but it will take a while to collapse in my opinion and you can make money in the mean time.
Needless to say, this is not a good sales tactic and I felt embarrased to even do that so after a minor effort to recruit one person I quit and focused on the passive ROI from posting ads on our one account. However, my curiosity got the better of me and I started wondering where my ads were being posted.
It seemed that when I posted an ad, a new website was created in some remote corner of the internet that nobody visited. How is this marketing I thought? So I did an internet search and this is how in mid Feb I came across this Behindmlm blog and realized what I had really gotten myself into.
I did not know that Ponzi schemes were illegal and felt like a douche for my attitude of as long as I make my money while the getting is good who cares.
The best thing for me is that we are lucky we did not set up more accounts under our initial account as we were being told to do a total of 3 or 7 (“power of 7”) adcentral family accounts to make real money. This was prevented by our overall laziness as well as the info in this blog so thank you to Oz and others for that (for the blog not the laziness :).
Then the compensation plan changed and changed and changed and now all I’m hoping is that I will make my small initial investment back. Forget making extra money…
So far I have withdrawn $300 through E-wallet (which is a horrible system BTW) prior to the changes. I did this because after reading this blog I was getting nervous that this company was going to collapse sooner than later.
Now I have $500 stuck in TF and tomorrow is the moment of truth as I will find out if I can withrdraw my money or not (for some reason I can only withdraw on Tuesdays WTF). In the mean time my wife is mad as me for not withdrawing $300 a couple of weeks back prior to all this news of plan changes and withdrawal freezes (sorry honey it slipped my mind).
Also, my relationship with my wife’s sister is somewhat strained as in the back of my mind I feel that she rushed us into this investment and provided misinformation.
This is just one example of the real cost of investing in a ponzi scheme (both financial and family). You hear all the success stories and the millions being made, but my feeling is that many are in my boat and are far worse off than me.
I can only feel for those that invested 3 or 7 accounts at the same time and then having to deal with all this bullshit uncertainty that is brought about by this ponzi/pyramid scheme that calls itself a legitimate company. There will be many people who will lose money in this as well as family ties that will be strained.
Anyway, I still hold out hope that me and all the investors make their money back and eventually come to peace with the wasted time and effort in their life that was invested in this company.
My gut and their current troubles puts date range from two weeks to two month. They are too big to be ignored or to be swept under the rug and since they are not paying out, amount of complains will snowball.
Only question is who will strike first: Massachusetts AG or SEC.
@haste and M_Norway
Well, I couldn’t watch the videos as they appear to be private, but I’ll take your words.
The thing is that when I registered in early Sept. 2013 and paid $50 for a partner + the Ad kit, I never created a customer account because I didn’t need the VOIP (it’s not working in my country) and the invoice is still in my back office with the same date when I became a promoter, and I’ve never been my sponsor’s customer, so I assumed that becoming a promoter is not connected with the purchase of the VOIP product in any way.
Those Telexfree leaders in Cambodia like Chhay Minea are sucking out student blood and destroy their future.
They claim Telexfree is 100% legal and approved by SEC. This is really stupid. They are even happier with the new plan of telexfree because they blindly think that this will make Telexfree stay longer and legal 100%.
Sadly, That will not happen. It’s impossible for every single promoter to recover their investment. TF does not produce any money, It doesn’t have a valuable or desired product.
The single moment one promoter “earned” more than they invested, they are ensuring some one else will never do that. And of course The top promoters and CEOs are the ones taking all the money.
They were from Scott Miller’s Youtube channel, but he has removed everything in the last 24 hours (or made it private).
He has 2 or more Youtube channels.
* Scott Miller
* Scott Miller Telexfreetrainer
It can be a sign of an upcoming shutdown if those videos have been removed, i.e. that they no longer will be useful.
At the end of 2012 I was struggling a lot on my micro business when I was approached from a friend trying to help and enrolling me on TF.
The moment he started describing this wonderful opportunity of working for this technology and communications company I smelled fish on the air. He was genuinely trying to share with me and literally help me because just like me he was living a real harder live as a self employed and on top of that being illegal ( undocumented ) with lots of liabilities on his shoulders.
I declined the offer because I could see any logic in getting paid to make advertising ( real money for an otherwise too simple of repetitive job, nothing that thousands of people in India couldn’t do for 1/100 of the money and probably way more efficient as well ).
I immediately thought this is a pyramid and told him but he didn’t listened. A year later he was on top of a sizable network of affiliates and was making an impressive amount of money weekly. But he kept most of the money in TF betting that at some point he would be able to cash hundreds of thousands of dollars and possibly invest on a franchise or some higher level investment.
All the high hopes and all the dreams of way better tomorrow ( with all the brainwashing applied to TF affiliates he would believe that TF was truly a God given pass to the riches ) all of that started to rapidly crumble and were reduced by pieces.
First was the denial mode but later confirmed by a flood of messages and calls of tens of people he referred to TF inquiring about their investments.
He is back at the known hard reality of making barely enough money to get by with his family. But he believes now that luck will strike again through an MLM opportunity, he is now one more between millions, addicted to easy money, he does not believe in hard work anymore. He got the bug.
I finally, surprisingly started to reap the fruits of my consistent own work on my field.
I feel sorry for all these peoples dreams that wont turn into reality.
Some TF promoters are reporting that they can’t transfer their E-Wallet money to their bank accounts, the only country available is US, all other countries are missing from E-Wallet options.
They reported that E-Wallet support inform them that the client (telexfree) requested a “blocking” for all countries outside United States.
Can any of you fellows confirm this?
Myself and a friend who followed the case of Telexfree through this blog made a video with the intention of turning it into a viral. Forgive us english “Google Translate”.
This video was based on comments in various posts on this blog about the sentences spoken by Carlos Costa in Brazil. Share, please.
I think everyone should be suspicious of any company promising to make them rich just by posting one online ad per day, especially when you have to pay them to join.
There are legitimate and effective ways to advertise online, mainly through buying banner ads on established websites. Having thousands of people posting spam ads to free classified ad websites is totally ineffective, especially when everyone is posting to the same one or two sites.
Not to mention that buying a few banner ads is a lot cheaper than paying thousands of people to spam the internet. Any time you see an MLM scheme which says something like “we pay you to advertise!” you should take that as a huge red flag.
Let me clarify
the $0.15 is not equivelint to a $49.90 voip, all they are doing for the $0.15 is setting the voip up for you and you still have to pay the $49.90, telexfree is not that stupid to let people get away with a $0.15 charge when they want to sell it for $49.90 whether it is crappy or not.
Serious question: Does Carlos Costa speak English? I don’t recall ever seeing him use it.
I’m seeing scattered reports. Not enough to do a separate writeup yet.
TF are apparently telling affiliates to contact iPayout… iPayout are telling affiliates to contact TelexFree.
I seriously doubt it. A long time ago, when he was interviewed about the scam being investigated and the possibility of him leaving Brazil, he told the reporter people should not worry because he DID NOT EVEN HAVE A PASSPORT.
So, can you imagine a person who inflates his ego by calling himself “international maketing director” of an AMERICAN company that does not have a passport nor a visa?
That’s our Carlos Costa, the MLM “genious”.
The way I understood it is that, for the old plan, you need $50 to become a “promoter” (or maybe “partner”) and sell TF VOIP plans @ 10% commission. You don’t even need to puchase an AdCentral really to sell VOIP. The AdCentral Family costed $1325 and allowed you to sell 5 VOIP plans to customers every week @ 90% commission or sell them back at the end of the week to TF at $20 each for a total of $100/week (assuming you spammed the internet every day that week).
However, in order to qualify for direct commission and binary commission for recruiting others, you need at least 1 VOIP customer which can be yourself of course. This is where the $49.90 VOIP suscription comes in. I think that you can still make the $100/week for posting ads without ever becoming a VOIP suscriber.
The reality is that their compensation plan is so complicated that most new rectruits just signed up for the VOIP and didn’t bother with the details. The $49.90 ($4.99 after commission if you purchased this for yourself), was small change compared to what you were going to get passively for the year.
Lol between Labriola not having a clue and Costa not having a passport, they really put the gnat in TelexFree International.
Sorry this should be $1375 in my above comment
Its been an abosolute pleasure to read this blog. Its been a great honour to read Mr Norways, Hoss, Oz (of course:) Chang, Dorothy and the input of others that have been, in one way or another, dealing with Telexfree.
My humble thanks for your know how and wisdim are much needed. Among telex tubbie friends here in Bournemouth, Uk, i quickly “educate” them on the assumptions via the info on this blog.
My self i have some “dollars” stuck on my back office. Unsure how to get it back. Considering the credit remake.
I opened 3 accounts back in 2013. Made some of my investement back. A friend of mine, Brazilian, here in the Uk convinced me to join. I researched a bit and found this blog. Twice i declined (^^ im an idiot!!^^ 🙁 ) But, being still green and stupid on the actual mechanics and dynamics that go behind a plot such as this, i jumped in.( yeah right…er:)
Although i understood the idea of Ponzi and pyramid schemes, i guess only now do i actually see the reality of it. In any event, there were indeed ppl that made alot of money on this crap…indeed, with the money of others!!!
I blame myself for trying it out. My friend did not do it to harm me. Per say…i hope at least.
A fact though i must say of Brazilian mentality and culture. Their country is fertile grounds for this kind of schemes. Ignorance. Poverty. Low wages. Lack of concrete knowledge of MLM workings PLUS the actual Brazilian mentality. What kind of cultural loop hole is behind that famous frase of C Costa ” Gods company”? It is one of religious evangelical brainwashing. Something very culturaly Brazilian. Hence he said it. And sold it.
Here in Bournemouth, the groups that i know behind promoting and recruting are, no suprise, linked to the evangelical “churches”. Hence the way it spread here. Like wild fire. Then we add that Brazil is such an economical slavery soap opera country were corruption is an Art form, Real Art, the result is Telex Fres…
I agree with Antonio. I live in some town as he does and know of a few friends who are involved in telexfree some for a while and others last 3 or 5 months. Most are too prond to admit they lost money or wasted time.
All say they have made back what they invested and some even a little more. Some claim this dispite of reinvesting just before new contracts came in to force in second week of March. I dont think they made any money because of the reinvestment but they all seem to be in denial mode.
None have tried to sale voip to real customers and at least one friend said he has no intention at all as sales is not his thing.
Some new it was a scam to beguin with and said they would never go into it but greed is part of their nature so they went in anyway.
Now the dream is over with telexfree but they already looking at wings network. they will never learn and authorities are to slow to react if at all.
In the case of Madeira island even the police and politicians are in it. So it’s claimed. Cant whait for the day that there is an actual lockup of accounts to teach them a lesson.
Ola Bournemouth!!! :)))) tudo bem 🙂
Ah Madeira……such beautyfull place. Alas, portuguese from there have much to learn about the reality of Telex…Would be easier if there was a portuguese version of this blog. Its still easy to hoodwink portuguese. Me included;) Some asswipe with a suit and tie, all business like, “body language” screaming “im rich!” and most are hooked!!!
Madeira exelent spot for Telex. Quite ignorant on this and although not evangelical a great deal of ppl there are hard core materealistics. The down fall of western culture. Where portuguese ppl, generaly speaking, seem at times to be in exclusive competetion with one another to see who has the biggest car, house, iphone 5…i pad etc…Trully “True” poor ppl.
Most of them cant handle the psychological manipulation infiriority complex ilusion of Status driven existence. And the other half really need the money!! Recession!!!! I hope this SEC closes this company fast. They trully did prey…like a predator, on the needs, on the greed, on a diversity of human psychology to make for themselves a toooon of money. Not unlike The wolf at wall street. A comical movie with the down fall of glorifying greed.
It amases me still SEC have not closed this company yet. I have no familly. Live in a tiny place. Although i will miss my money there was no real damage done…mors like pride hurt and lesson learned. But, BUT, to those who got involved with Telex out of need and necessity, and now are trully worse off……i presume there will be payback…by someone reallllly pissed off!!!
Guns are cheap in the US. Labriola better be very carefull. Hes lucky the mob or the chinese triads have not joined in.
Although i do not agree with bodily harm…there ppl in this world that are true “little boys” and do indeed need to learn some responsibility for their actions.
Oz, can you please do a review on this Company? I’m starting to see a lot of Telexfree promoters pimping this one: Genesis Global Network
Genesis Global is on the review list but it will probably take a while for a review to get written.
I’ve been way behind with reviews/email the last few months, too much RL stuff to deal with!
Licensing interview State of Alabama Telexfree LLC, a Nevada LLC
$646,000+ in fraud and $666,000+ in chargebacks for 2012-2013 too.
I wonder what they classify as “fraud”.
http://patrickpretty.com/2014/04/08/zeek-beater-telexfree-llc-filings-in-alabama-says-firm-posted-total-income-of-nearly-700-million-in-2013-thursday-hearing-on-telecom-application-in-state-delayed-at-companys-request-firm-may/
(Alabama interview document is linked in the third last paragraph of Patrick Pretty’s article)
What’s even more interesting is the filing states they’ve already paid out $572M of the $689M they took in from affiliate investors.
Even if we’re stupidly generous and halve the amount they took in, that’s 1.1 million AdCentral positions.
Estimated AdCentral liabilities for 2014 would thus be $1.2B, or roughly just under double of what TelexFree took in during 2013.
If any affiliates are wondering why they can’t withdraw or why TelexFree keep changing their compensation plan, the above is your answer.
It has nothing to do with SEC or regulatory action, which is is a separate issue altogther.
There’s a reason TelexFree requested their 2014 Profit and Loss be “filed under seal”… they know they’re this close away from an all out affiliate revolt.
I’ve got a mountain of crap to deal with here at the moment but if anything further develops, I might put out a separate article tonight going into a little bit more detail.
SEC or no SEC, mathematically TelexFree are obviously going to collapse this year.
The idea seems to go like this:
1. Copy Zeek Rewards (Penny auction revenue share)
2. Place the company outside US jurisdiction (Belize)
3. Add a lot of other components, to make it look more legit
4. Divide the pre-launch period into 4 phases
Point #4 is probably about that it’s easier to recruit “early joiners” if you can say “it hasn’t launched yet”. It can also be used as a defense against potential critique = “the concept hasn’t been finished yet”.
Point #3 was all from nutrition to travels, from website views to …
One of the comments in the MMG forum said “It reminds me of GlobalONE, and we all know how that turned out”. I’m not familiar with GlobalONE, but it surely reminds me of COPIES of different ideas. I haven’t looked at the compensation plan, only the IDEA.
I used some search methods, to see how the website was organized and how the program was promoted. Currently it doesn’t have much of a “footprint” on the internet = it is less successful than the organizers hoped it would be. Currently there’s 7,200 “enrollment attempts” found on the internet, mostly classified ads.
Shamefully I must agree with everything you wrote about Madeira Island and portuguese mentality…I can verify that because I live there!
I hope SEC closes this scam ASAP for 3 reasons:
a) to stop it from hurting more people
b) to financially “punish” those that thought they could rich fooling other people to get in the bandwagon (unfortunately people only feel the need to change when they get hurt or sense that are going to get hurt, especially Latin people)
c) simply because it’s a….SCAAAAM! Everyone can see that! Shouldn’t that be enough?!
An interesting article written by PatrickPretty. I’m looking forward to reading the Application.
A quick breeze through….a lot of things caught my eye but especially the line reading Charitable Contributions = $7,500.00
First thought, with all the money this company made this year and they could only dig up 7500 dollars to donate to charity? Really?
Second thought. Just who was it that touched the heart of the Telexfree Top dogs so much so that they all got together to dig around in the seats of the private jets and limos gathering the loose change to donate? Nice gueys I tell ya.
Third thought? Will the contributee have to give the money back when the sh** hit’s the fan? Telexfree is the “butterfly effect” on steroids.
Another little line ditty also stood out.
Direct Inbound Dial and access numbers. I think these represent the block of numbers that Telexfree would have purchased for voip product. If I’m correct then this would be how many service’s of voip they could sell. Somthing not quite right if they took in the income they claim and the percentage of commissions paid out if it is based on 15,256.18 phone numbers. ???
In terms of ponzi / pyramid fraud, just enough to impress the unsophisticated and naive at whom much of the fraudsters’ efforts are aimed.
One thing to remember:
Fraudsters don’t want people like you who question.
As a typical fraudster was recently quoted as saying, they are looking for what he termed “low hanging fruit”
Madeira Autonomous Region president compares local agriculture to Telexfree:
http://dnoticias.pt/actualidade/politica/440859-jardim-compara-agricultura-madeirense-a-telexfree
Nobody told the poor thing the party it’s over? :-\
Any one with good sense will agree with you guys, but some people here in Madeira are too blind or ashamed to accept it, and the problem is the amount of so called “MLM companies” that are spreading around this Island (Wings, Wenyard, LibertàGià, Automatrix, Empower Network, etc.).
When you have a Government President with this kind of comments in an official visit, sounds irresponsible…
http://www.dnoticias.pt/actualidade/politica/440859-jardim-compara-agricultura-madeirense-a-telexfree?utm_source=auto_rss&fb_action_ids=10152090934939331&fb_action_types=og.likes
Now they are coming up with a credit card to transfer the money from e-wallet..do you know if this is for real…?
I still don’t understand why these top leaders from Russia or Ukraine who are making up to $500,000 monthly spend this money like crazy (mostly on exotic cars)… They are smart enough and know what SEC and clawback is, maybe they think that countries out of “Hague Party Convention” are untouchable?
There is a list of non-convention countries:
https://www.momatlast.com/adoptionapp/list-of-non-convention-countries-for-adoption/
Some of them moved to Dubai… so this could mean something.
And there is a comment from Zeek Receiver:
Anyone know something more?
There is a certain level of practicality involved here. Somehow I think those on foreign soil are not overly concerned.
I can’t imagine not suing someone who took millions from a ponzi scheme, even if he live foreign, it is still “cost-effective” for lawyers.
In this video Kevin Thompson ask other lawyers about Zeek liquidation process:
http://www.youtube.com/watch?v=YSfx7-QYm7g
They say that $200,000 is enough “cost-effective” for clawback to someone outside USA.
But still, I never heard about such case, to this time, only USA members were sued. In case of Zeek, they only wrote: “claims against net winners outside the U.S. will be pursued in future actions”. So this may mean that it never will happen…
The SEC won’t be able to touch someone in Russia, the are untouchable. There many hackers that steal money from USA and nothing happens in Russia the worst that will happen is that they won’t be able to travel out of Russia.
Have the USA been able to touch Edward Snowden in Russia?
There are a host of considerations. I believe the Zeek Receiver will obtain judgments against foreign residents, and that in some, but not all cases, the judgments will be recognized and enforceable in foreign countries, but even so, actually collecting what is owed is what I doubt.
The Zeek receiver has been willing to compromise with US residents at about 56% of net winnings. This I judge is an indication of how the Receiver feels about chasing funds. It very difficult to collect even if he has a judgment in hand. I anticipate that foreign nationals would be accorded an even larger discount for cooperation and settlement because the difficulty and cost of collection increase dramatically outside the US.
Its not just that attorneys can be paid, but whether, after all is said and done, the creditors of the estate benefit. That should be determined on a case by case basis and unfortunately I think some nuts are going to be too hard to crack.
You can’t equate Snowden to Ponzi swindlers. Wrong type of crime.
Yesterday I was told but an educated individual, whom recently joined TelexFree, that he knew all along that the business model was a pyramid but he joined anyway to make a quick buck.
From what I’ve seen, the people I personally know that have joined plus some acquaintances, is not always about the education level but a lot to do with “greed” and the lack of desire to do real work/labor.
Yes, it’s easier to attract someone who doesn’t require a whole lot of explanation but money it’s hard to turn down I guess. Then you throw in the “God” factor and some fanatics readily will follow blindly.
Based on the the speeches I’ve heard, there is a lot of brainwashing techniques and the “affiliates” have cult like behavior. So, you got money, God, and sheep minded followers with greed and the need to show off and not wanting to do actual work and you got yourself a MLM business.
It isn’t the SEC that potentially may sue net winners in foreign countries, but a civil entity (a trust). It can file claims locally in the countries where the net winners live and own some assets.
There’s a lot of people like that when it comes to this type of scams. It was well explained by M. norway on another thread:
Most people who joined TF knew it was a Ponzi, but were willing to GAMBLE. And that’s what’s all about. I gambled back in december and was able to recoup most of my “investment”. Many won and many lost,just like when you go to a casino.Ponzi schemes are popping up all over and people are GAMBLING on them. The money you win at a casino comes from the people that lost, therefore you win money at somebody else expenses, just like in a Ponzi
And just like gambling, ponzis are addictive, they’ll just go from this one to the next one.
I’m not the “addict” type, so I will not be going to another one, but I understand that there are no “victims” here, just gamblers that lost their bet.
The gambling in a casino is quite different. If you win, the money will legally belong to you. You can also reasonably be able to calculate the chances, risks and rewards.
In casinos, you don’t need to wait 2 years (after clawbacks) to find out “Did I win or lose this time?”.
Ponzi schemes are more like rigged games, where the intention is to make you become a loser. They will only need to allow to win something from time to time to get you hooked on the game.
It’s not “like” at all.
When was the last time you went to a casino which pretended to be something other than a casino ??
What absolute nonsense
How many of the TelexFree members have you asked if they knew they were gambling ??
If you haven’t spoken to them directly, how can you possibly know what they were thinking when they joined ???
You have no idea at all of how many people thought they were joining a legitimate business and how many knew it was a ponzi / pyramid.
I know it’s a small popularion to derive statistics from, but I know a lot of promoters that when I told them it was a scam most of them said they knew and just wanted to make money out of it.
Of course , they could just have been lying to get rid of me and some actually believe it’s legitimate business
“Small population” is the understatement of the century and “lots” doesn’t even make it into the statisticians handbook.
With membership numbers in the 400,000 plus range being bandied around “lots” of admitted gamblers is hardly worth mentioning, compared to the amount of naive and gullible victims.
Let’s not trivialize the fact TelexFree has been specifically targeted at unsophisticated low income earners and the desperate in some of the poorest economies in the world, and the fact the criminals behind it continue to prey mercilessly on their victims as we speak
If so, perhaps the Feds should bring a racketeering-conspiracy case.
Another reason for the Feds to consider a racketeering prosecution. Common promoters. Common payout rates. Common language (“Don’t call it an ‘investment.'”) Common venues (Ponzi boards listed in federal court files). Shell companies. “Usual suspects.” Common transmission by wire. Unconscionable “contracts.”
Convenient deal-making that isn’t at arm’s length. Common attempts to imply government or media endorsements. Attempts to intimidate government/media. Circuitous movement of money. “Whack-a-mole,” also known as “get out of Plan A while the going is good because a new set of racketeers has set up a Plan B that encourages/permits all of us to become co-conspirators all over again.”
You may think you “understand,” but it won’t be so. The “no victims” narrative is common in organized schemes to defraud. The narrative, however, crumbles under the barest of scrutiny.
All it takes is for ONE senior citizen from ANY federal jurisdiction to claim that they sent $289 from their Social Security check to TelexFree because the fine Man of God down the street said that $289 would turn into $1,040 in a year.
In a certain way, the HYIP scammers make it a cakewalk for the Feds. For example, lots of promoters produce videos and other offering materials that show senior citizens or members of other vulnerable populations as the target audience. There are videos, for example, that show “programs” being pitched to people with hearing impairments or people who don’t understand a word that’s being said because they don’t speak the language.
What the HYIP scammers ALWAYS ignore is that the Feds ALWAYS can find a senior citizen who’s been ripped off, perhaps one who can’t walk on her own power and was introduced to the “program” by her pastor or priest.
Now, contrast that courtroom scene with the scene of an HYIP huckster reading from the same old script that he or she never encouraged people to spend more than they could afford to lose and, in any event, payouts were never guaranteed.
There will be other victims, too. These will include individuals whose names and identifying info were used without consent as nominees in member-initiated sidebar schemes to “stack” earnings. There also will be undocumented immigrants and more grandmothers than you can count — and some of the grandmothers won’t even know they were “in” the “program.”
The victims also will include people who were at risk of losing their homes and turned to the “program” as a sort of Hail Mary at the 11th hour.
PPBlog
I’ve personally heard more than a few stories where the daughter, who found the “program”, and believed the hype, figured she’ll “borrow” like 10K from elder mom’s account, make a ton of money, and put back the 10K and live off the “profit”.
And they ain’t got the 10K back…
And don’t forget at least one Brazilian jumped off a building when she realized her money’s lost in TelexFree. I think she died.
You don’t understand dick.
You guys can say what you want, but all the people a know that joined TF knew it was a Ponzi, and they all went in with the hope they could get something back before they (TF)busted.
People are not as naïve as you think. Again I repeat- I BET AND I LOST, and if I had gone in a month before, (November 2013), I would’ve walked out with a $300.00 profit.
I’m pretty sure she knew what she was doing.
I have found SOME people who genuinely believed in SOME parts of the business plan. Remember that official marketing videos have focus on retail sale, so it depends on HOW the recruiting promoter has presented other parts of the program.
Two different things.
“all the people YOU know”
versus
“all the 400,000 claimed members”
Exactly how many of the claimed 400,000 members all over the world do you actually know well enough to ask if they knew or didn’t know ??
10 ?? 20 ?? 100 ??
Just watched the video in the end of the article – LaBriola is such an unexpressive person. His “excitement” made me want to go to bed and sleep -.- zzzzzzz
Gotta love that he hardly looked at the camera in the first half of the video. Does anyone know what is this 1K club thing he mentioned (twice)?
So what happens to all of those distributors when the company files bankruptcy. Will they ever see any money owed them?
Dear mr. littleroundman, I know about 10…. how many of the other 400.990 members do you know?
And talking for myself now,I just cant believe people are so ignorant that if someone come with a postposterous deal like TF,red flags wouldn’t be raised in their minds. But if they are that stupid then they are just meat to the wolfs.
The world needs prey and predators, and the predators MOSTLY comes disguised as legit business (read consumers complaints). Remember… CAVEAT EMPTOR.
Always good advice, but consumer and securities laws are in place to deter the dishonest from taking advantage of the honest.
Half of the population is below average when it comes to experience, knowledge and the ability to think, which means that many simple minded and honest people can be taken advantage of….so we pass laws to protect them….all of us….from each other.
You may now argue and believe that people should watch out for themselves and there is nothing more to say on the subject, but many people are incapable of discernment and charlatans abound. For this reason “caveat emptor” can not be viewed as a foundation for civilized commerce; implying as it does that “the seller of a product cannot be held responsible for its quality.”
While the predator/prey analogy you used has some competitive truth to it the fact is humans are not wolves and persons who behave as if they are often find themselves outside the law. We call these wolf-people criminals when they are caught.
Like Barnum said, “theres a sucker born every minute”. To this day I cant get the guy who got me into TF to admit it is a Ponzi, despite all that’s happening.
I was motivated by curiosity and greed and little gambling instict too, as i think a lot of people did. Millions of people play the lottery despite incredible odds and so the poor gets to pay for things that taxes should take care of.
Just an example of the predator/prey thing happening legally. I don’t condone taking advantage of the poor, but who said life is fair. You guys can continue championing your cause, but I doubt you will change the minds of those that are born without common sense.
@takaro
You only need to look at people like your upline, and all the other people who were running around telling recruits TelexFree was a legitimate business opportunity to see your reasons are yours alone.
By all means make up whatever excuses to justify or explain away your involvement in TelexFree, but let’s not pretend a whole host of people weren’t sucked in under the false pretense of legitimacy.
As for causes, this is an information site. Applying your own pre-conceived notions to a wider base would appear to be a recurring theme with you.
A perfect example of how the morally bankrupt try and justify their involvement with fraud by any means possible.
While that quote is often attributed to PT Barnum, he didn’t say it, and publicly denied ever having said it.
In fact, it is the complete opposite of PT Barnums’ personal philosophy, which was more along the lines of: “There’s a CUSTOMER born every minute”
But, you go on soothing your own conscience by justifying your behaviour.
Programs like Zeek Rewards and TelexFree will need a lot of people willing to believe in the idea, willing to believe it’s about legitimate business.
They don’t need to FULLY believe in the idea, but they will need to believe ENOUGH to make it become “acceptable” to join it. That’s what the “GUMP factor” is about, the idea needs to be believable enough to be accepted by Good Uneducated Money People.
GUMPs will have relatively plain and simple motives, e.g. investing money for retirement, education, debt reduction, and other “normal” motives. They’re not very attracted to hardcore recruitment based opportunities.
GUMPs can be fooled because they don’t have the right type of experience or knowledge. They will find it impossible to believe that a 65 year old business man with 14 years experience in business will start a fraudulent program. They don’t have any information pointing in that direction, they have quite the opposite type of information.
“You don’t need to recruit anyone or sell anything, you will be paid for advertising the program”. That idea worked for both Zeek and TelexFree. Some people simply don’t have the correct knowledge to identify the flaws in that idea.
Missing GUMP factor –> the program will most likely not become very successful.
Bidify didn’t have it. JubiRev didn’t have it. Wings Network doesn’t have it.
It’s possible to analyse SOME programs and see why they will fail, by looking at which TYPES OF PEOPLE the program PRIMARILY tries to attract.
* “Reload scams” will TYPICALLY try to attract people who want to believe they are “great leaders”, people bringing in downlines from other programs. Normally those programs will collapse within few months.
The opposite idea, “try to identify programs that may work”, is much more difficult. If anyone WANT to identify programs like that, they should probably focus on “GUMP factors”.
In Russia no longer receive money from a Telex from 11.04.2014
I apologize for Google translator
Thanks for the local update. We have missed updates from Russia and several other countries.
I don’t believe you can expect any solutions to the payment problem. TelexFree is under investigation by federal and state authorities in the US. It will most likely get worse.
I’m reading multiple reports suggesting global payment problems for TelexFree afiliates (requested funds not showing up in their iPayout ewallets for withdrawal).
Probably won’t know anything concrete till Monday (pending the sudden emergence of funds before then), as that’s when people will be able to call up iPayout and ask where their money is. Apparently calling up TelexFree is somewhat of an exercise in futility.
1099 tax problems also still haven’t been resolved for some affiliates too (this was published less than 24 hours ago):
Costa has been MIA since the 2nd of April and there’s been nothing from US corporate since the Labriola video on April 6th.
@Oz
I see a lot of despair in TF Facebook since yesterday, regarding payment issues. Some people have been posting that this info was available to them:
Another provider as in another ewallet service or do iPayout outsource parts of their payment processor services?
When you click on e-wallet, it just takes you to the notice of Bankruptcy filing. So you can’t access e-wallet and effectively this is like freezing a bank account because even with money in E-wallet you cannot do anything.
The best case scenario is that they are trying to allow people to access the money in E-wallet via another route or provider or debit card or whatever. But, with everything going on now this is unlikely to be the case…
Did i say i love you guys 🙂 (in a brotherly way of course :).
Well, there u have it 🙂 Guardian angels of integraty and information:). Love reading this blog. Great minds here :).
Yes, Patrick Tarmey is behind it all and is a serial con artist.
He also utilized a loophole in Groupon to defraud thousands of people who paid for paragliding rides, but were never able to schedule their trips within the required time window (Tarmey continually cited “weather issues” to individual customers, but never completed the service.
Groupon ends up refunding money for services not rendered, but Tarmey (and his bank account) were already long gone with their cash).
Hell, he even ran a fake “pay to play” scavenger hunt that is being investigated by the state AG.
fox25boston.com/news/players-complain-man-running-treasure-hunt-lied-about-hiding-prize-cash-1/142713706
He also used Groupon to push his “Wipeout” course, his “Zombie Apocalypse” attraction and other scams that have come and gone.
It should be no surprise that he recently changed his name to Patrick Thomas and fled to California where he makes YouTube videos under the name Patty Mayo.