Top Ugandan TelexFree affiliate arrested
One of the common questions we get after a major Ponzi scheme bust in the US is “what about affiliates overseas?”
Surprisingly, arrests have yet to be made in Brazil (the “heart” of TelexFree), with the company’s management and top affiliate investors still running about professing TelexFree’s innocence.
Over in the Dominican Republic, some initial reports came in suggesting arrests had been made, but to date nothing concrete has surfaced.
Other than that though, to the best of my knowledge, anyone involved in TelexFree outside of the US has yet to be arrested.
Making some progress on rounding up local fraudsters though is the unlikely candidate, Uganda.
Reluctant to launch an investigation into TelexFree, despite neighboring Rwanda banning the company, Ugandan officials arrested Ronald Muramuzi on charges of cyber fraud.
A scenario likely to be familiar amongst TelexFree’s top investors, Muramuzi had his pie in a few Ponzi schemes, of which TelexFree appears to have been the most prominent. Using the fake names Morgan Mugisha, Bob Mugisha, Muramuzi Ronald Kato and Kato Ronald, Muramuzi launched his online Ponzi career in 2012.
In addition to TelexFree, other schemes Muramuzi recruited investors into include:
- Tesco Trader (2-4% daily ROI Ponzi scheme that collapsed just earlier this month)
- AdFast (seems to be a TelexFree reload scheme)
- Bank Electro (pays out 1-5% ROIs on “deposits”)
- United HYIP League (collapsed Ponzi scheme that promised a “120% ROI after one month”)
- MassiveAd (Ponzi scheme that accepts $100 – $10,000 investments on the promise of $10 to $1500 ROIs paid out every 10 days)
According to Ugandan authorities, Muramuzi’s total heist from the 600 or so affiliate investors he recruited into the above schemes was 4 billion UGX ($2.37 million USD). How much of that was from TelexFree though was not clarified.
According to Ugandan news outlet UGO, Muramuzi’s stolen fortune earns him the title of “the richest youth in the country”. Muramuzi spent his stolen funds on a nightclub, a house, two rental properties and a local newspaper outlet.
The purchase of a newspaper outlet seems a bit odd. Perhaps Muramuzi and his downline were using it to spam their daily TelexFree ROI ads into?
The nightclub has since been sold, following Muramuzi’s arrest.
Unfortunately, that arrest came about only after TelexFree was shut down by US regulators last month.
(Muzamuzi’s) arrest came shortly after the closure of Telexree, under which he was operating.
A question mark now looms over what will happen next, but from the sounds of it Muramuzi’s scamming days are over. No word on where his millions have been stashed or whether the investors he recruited will recoup their losses.
By rights TelexFree should have, at the very least, been on the Ugandan regulatory radar when Ugandan Ambassador to Rwanda, Richard Kabonero, publicly called on his government to investigate the company in March.
What said regulators were doing before March and after Kabonero’s call for an investigation, remains a mystery. I suppose however that in the aftermath of TelexFree, the arrest of Muramuzi is still something though…
Time to get your shit together Brazil, the arrests of Carlos Costa and Wanzeler are long overdue.
Update 20th June 2014 – Muramuzi is out on SH 300M bail ($116,508 USD). As part of his bail conditions, Muramuzi had to surrender his ‘passport, a land title and three sureties‘.
The sureties included brother Edward Barijje, Richard Karuhanga, a lawyer aged 40 and Chris Katibalirwe 46, a doctor. They were each bonded on sh200m non cash bail each.
The case returns to court on July 7th, with Muramuzi continuing to deny all charges against him.
It is ironic! The Uganda Justice is better than Brazilian and USA justice! They arrest an affiliate before any other country! (Ok, the dominican justice did it first)
But, this dude made so many shit, that is easy to anyone arrest him!
All 5 of them are investments. 4 of them will generate legitimate income. 2 of them are business types where you naturally will come in contact with many different people, “potential new participants”. One of them is open during daytime, the other is open at night / in the weekend.
“How to naturally come in contact with people” is one of the most difficult problems to solve if you’re selling something. It’s much easier if you have a stream of people coming to YOU rather than you having to visit THEM.
That’s a potential explanation for 2 of the investments.
It’s not just Brazil and TelexFree, it’s also the USA and large MLMs like Amway, that need to get their act together.
Boy, that anti-TelexFree octopus has its tentacles reaching far and wide. I don’t think it’s quite done yet.
well . this is really amazing how all this south american people still joining others ponzi.
onethor is growing in perú , colombia, etc. if you remember the president of onethor is misael martins , ex telexfree millionaire, ( well the vídeos are in youtube he is telling everybody to join telexfree because he got rich with one adfamily. somebody must investigate these people .
the same with paymony another ex telexfree rich of course from brazil. google and youtube and you will get sick reading the portuguese comments . somebody must stop this .
If Uganda arrests top affiliate, why is Brazil so chicken to arrest the top promoters there? The reason is why is because they need to substantiate a warrant for their arrest.
The fact that the made millions off their downlines doesn’t seem to carry enough weight to justify arrests. The fact that they promoted a scam, disguised as a legitimate operation and blessed by TelexFree’s attorney in the U.S. does not seem to be an issue.
However, Brazilian authorities are quick to freeze bank accounts and hold the money. What if one or more of those top promoters imply take the money they made and move to another country like Portugal, Mexico or Spain? Then it’s too late.
telexfreenovela.blogspot.com/2014/05/telexfree-following-money-trail.html
Under brazilian law, freedom is the “biggest asset” of a person. At least for any person that can afford a lawyer, prison without trial is only allowed under a very strict set of circunstances.
Here, without a trial, you dont stay in jail for anything you DID. You only stay in jail if there is fear of something that you are clearly WILLING TO DO. Harass witnesses, create chaos, etc.
I’m not a lawyer, tough. This is how I understand our set of laws.
For example, if Costa begins to make virulent videos urging the zombies to make something disruptive, he can go to jail to await for the trial there.
But im my opinion the law is wrong. The outright lies of Costa in his videos should be enough reason to keep him in jail until trial.
Those fellows must caugh our money, Muramuzi in Uganda and the telexfree guys should put back the sites, activate bank wire so that we can withdraw whatever was on our back office before sites were pulled down.
Interestingly, the day Muramuzi was arrested was when his adfastinc site went off. On 6th April 2014, he had pested a massege to all active adf users, that bank wire was then active for those who had 2 referal credits.
WHEN we fulfilled the condition, and innitiated bank wire no money come. the rog fooled us like telexfree that started shifting goal posts on the new compesation plan.
Getting close to that. 2 cars from Carlos Costa along with computers and other assets from Ympactus are being seized since last 20 May to pay 5 Brazilian investors who won their cases on court. One of them got not only a refund, but 2 times more what he invested for moral damage.
More successful claims on court are expected in the short term relating to Brazilian investors.
gazetaonline.globo.com/_conteudo/2014/05/noticias/dinheiro/1487475-juiz-penhora-bens-para-pagar-a-divulgadores-da-telexfree.html
In another (Brazilian) news
And my favorite part of the article is when the “celebrities’ lawyer” says even if Wanzeler is summoned to testify in the US, he won’t go because he (the lawyer)
Oh boy… Wanzeler was interviewed by a local newspaper saying the mantra “we are not a pyramid” but saying nothing about why he left the US. Looks like his lawyer and Brazilian partners in crime next move will be shouting “death to America”.
A photo of the paper can be found here (in Portuguese): https://scontent-a-mia.xx.fbcdn.net/hphotos-ash3/t1.0-9/10366222_498074080320589_8343495872753203437_n.jpg
Source of Wanzeler’s lawyer article (also in PT-BR): http://veja.abril.com.br/noticia/economia/wanzeler-vai-ficar-no-brasil-definitivamente-diz-advogado
This is not much different than in the US.
Once a person is arrested in the US there is a hearing to determine whether he/she must remain in jail or can be released until trial. This is based on the danger the person presents to the public and whether the person might run away (is a flight risk.) This proceeding is called a bail hearing.
Bail (money or property) is paid or pledged to the court and buys the prisoner’s release. It is returned to the person when the case is adjudicated or dismissed. The bail amount is generally based on the seriousness of the crime. Many persons are released upon their own word if they promise to return when ordered.
Here, Merrill was deemed to be a flight risk. If it were not for that he probably would have paid a large bail amount and been released pending trial, but given the circumstances he will remain in jail pending further action.
As a material witness who was also determined to be a flight risk, Katia will remain in jail until she gives her testimony.
It’s simple to blame a faceless government doing its job.
But isn’t it interesting that the divulgadores were clamoring how US justice is so much better than Brazilian justice only a few months ago, eh?
Maybe the Brazilian TelexFree divulgadores can picket Wanzeler’s residence with signs “Where is our money?”
This plain pisses me off. I hope they hang the little “” and his lawyer with him.
FBI VICTIM ASSISTANCE
This might have been posted by some others. FBI has put up an online “Telexfree victims questionaire” form, and a related information page. It’s for investigation purposes, not for filing claims and payment proofs.
Links disabled to avoid moderation queue.
Info:
fbi.gov/stats-services/victim_assistance/seeking-victim-information/telexfree-inc.-case
Online form:
forms.fbi.gov/telexfree-inc-customer-questionnaire
QUESTONS ASKED IN THE FORM
Note that they’re asking for a specific format for how to enter account details = each account within [brackets] or (parentheses).
I haven’t tested the form, but it seems to ask for a little more details than the Mass-Sec Complaint form.
Katia is a “material witness”. Orans dictionary of law defines material witness as:
She is one of the owners wives and so will most likely have info no one else will.
She was trying to leave the country soon after her cowardly husband flew the coop like the chicken he is. …… So he’s working on his tan in Brazill while she’s fending for herself in New York prison. Hows that workin for ya Katia?
Someone should tell that “celebrities’ lawyer” that Katia B. Wanzeler only has been detained (not arrested), so he can allow his client to return to the USA.
Huh? There was an arrest warrant issued and picked up by HSI agents at JFK. A court ordered her detained after that arrest.
Language from the May 14 arrest warrant issued by a U.S. Magistrate Judge in Massachusetts:
PPBlog
Definitely arrested… warrant and all
I wonder if there is really a rule that states that spouses can’t be forced to testify against their spouses…. if so I wonder how that might apply here.
That new FBI Complaint form is confusing. Is this the same form the SEC put up on its website?
This is from “A Gazeta”, a newspaper from Espirito Santo state, in Brazil, the very same state where both Carlos, Wanzeler and Costa, live, and where TF/Ympactus headquarter is located:
There is a lot more here (but all in Brazilian Portuguese):
gazetaonline.globo.com/_conteudo/2014/05/noticias/dinheiro/1487475-juiz-penhora-bens-para-pagar-a-divulgadores-da-telexfree.html
And, regarding Katia Wanzeler, another Espirito Santo newspaper called “A Tribuna” has this screen capture of Katia’s rerturn ticked to the US, as published in that paper:
lh3.googleusercontent.com/-eo8Aw8hmxdQ/U36ItTjbcVI/AAAAAAAAFZs/od-7ft97AJ8/s640/PASSAGEMM%2520DE%2520KATIA%2520WANZELER.jpg
There is no further explanation about how they got it, though.
Basically Kakay (Wanzeler’s celebrity lawyer) is doing the PR spin on the truth… While it’s true that Katia Wanzeler had NOT been charged criminally or civilly by the US authorities, she is being held as “material witness” in a case that involves her husband, and “material witness” *can* be arrested.
There was an outcry not long ago about a rape victim who was arrested (as material witness) because she keep missing court dates to testify or even just to appear for an affidavit for her own case.
Excuse me for pointing out the obvious, but how does a plane ticket prove she was going to return to the US?
Wanzeler’s lawyer’s recent bullshit about freedom in the US clearly suggest she wasn’t coming back.
To the best of my knowledge Wanzeler didn’t surrender any of the money the preliminary injunction granted against him has ordered. He hasn’t co-operated with US authorities.
This was quite obviously their escape plan, with a plane ticket being neither here nor there. The real story is buried in the lead: Who purchased the plane ticket and who supplied the information to the paper?
Purchased AFTER her arrest, no doubt. US DOJ *does* monitor the internet, and they do see this sort of stuff… and it goes into the evidence file. Yes, special agents are assigned to print out such as evidence, and/or download videos and print screenshots.
Maybe someone with access to SAABRE or other ticketing systems can check if the ticket’s authentic.
Nevermind the fact that Katia Wanzeler has to testify infront of a grand jury. Something she can’t do if she flees to Brazil, even if temporarily (but again, the assertion she had any intention of returning is asinine).
Law enforcement said her NYC to RIO ticket was purchased on May 13. She was booked on American Airlines flight 973 and arrested prior to boarding at 9 PM on the 14th.
The itinerary shown in the screen shot was for travel on TAM airlines from Vitorio to Sao Paulo to NYC on May 29 The date of purchase is May 14, the same day she was arrested in NYC. Rio is two hours ahead of NYC meaning Katia was arrested at around 7 PM RIO time on the 14th but the news of her arrest did not break until the 15th.
Therefore, its certain the return trip ticket was purchased before anyone in Brazil knew she had been arrested and probably before she attempted to board the plane at JFK.
It appears from this that whoever bought the TAM ticket expected she would to return to the US on May 29.
The only money anyone in a ponzi scheme is entitled to is the initial investment and subsequent monthly fees. Not the money made from their downlines otherwise where is the line drawn?
Whether you stand make a little or a lot you still obtained that money through an illegal process.
But of course i doubt you would agree to just your initial back.
I received a request to fill out the FBI form via e-mail from the address USAMA-VictimAssistance (USAMA) (USAMA.VictimAssistance@usdoj.gov)
I believe I got this form because I had filed the Mass-Sec Complaint form in the past.
Unfortunately, for the many who indirectly signed up for TF via paying their upline (via cash, bank transfer, etc.), there is no easy option to describe this transaction in the FBI form.
The question is
Since I didn’t pay TF directly, I would have to pick the method I payed my upline and then describe further in the brief additional information section.
It will be a little complicated to prove how I joined TF because it is more convoluted than joining TF directly using a CC. The payment I made was via bank transfer to my upline who then purchased an AdCentral Family via internal credits that she earned or got transferred to her (by paying someone else).
My strategy, when the time comes, is to have notorized statements from my wife (who was the primary account holder) as well as her sister (who was the direct upline) detailing the above transaction with account name and bank statements.
I’m not sure if it will work and there is a potential for issues getting cooperation from the upline and damaging of family relations. But, this is the closest I can come to proving what I paid to join TF Ad Central Family. If this doesn’t work then I guess I’m SOL along with many other indirect paying affiliates…
http://www.investigator.co.ug/crime/2694-special-report.html
http://www.investigator.co.ug/crime/2721-bad-to-worse.html
I haven’t TESTED the form / checked the different options. If they have “Paid directly to my upline” as an option then they’re aware of the problem. If they’re aware of it then they can potentially find some solutions.
I pointed out for some people who used that method to protect against clawbacks that transactions can be identified in other ways than they THINK (people will typically think in a specific “direction”).
Your payment method was rather convoluted. I was familiar with all the internal transactions in SOME uplines/downlines (internal funds distributed down, money distributed upwards in the system). For some it was highly organized, people even had to pay 10% fee to upline. For others it was simply one of the available payment options.
You should probably go for the second description, “for me it was simply one of the available payment methods, commonly used”.
When I discussed anti clawback strategies, I pointed out alternative methods for how to identify transactions (or missing transactions). It was based on how databases are organized and the different options they offer for how to sort, display and list data. But that was hypothetical, based on descriptions from another program.
I tried to avoid that with “for me it was simply one of the available payment methods, commonly used”.
It WAS commonly used, and the primary function was the payment. Any alternative uses will be secondary functions. The same logic will also apply to pre-paid debit cards. They CAN be used for tax evasion purposes, but the primary function is about completely legal transactions.
About the only thing that form will do is put you on a mailing or email list so that you will be notified of criminal proceedings against the perpetrators, which at this time are only Wanzeler and Merrill.
All victims should receive one, not just those who filled out a complaint on the Massachusetts website.
@Paulo
Thanks for that update. Food for thought for those at the top of Ponzi schemes when they go bust.
Guess that explains why nobody acted on Richard Kabonero’s call to action and investigated TelexFree there.
Regulatory fail!
Article updated with news of Muramuzi’s bail. Next court hearing is July 7th.
What we don’t know much about is what the laws are in these other countries.