Brazilian SEC: “No doubt TelexFree is a pyramid scheme”

telexfree-logoAfter a flurry of action these past three months as US regulators took action against TelexFree, things have finally settled into a lull.

One owner, James Merrill, is currently out on bail and awaiting trial. The other, Carlos Wanzeler is on the run in Brazil. Regulators boned his wife’s attempts to flee the US to join him. To date, Wanzeler remains geographically cut off from his family.

The US Trustee is currently investigating TelexFree, with the results expected to lay the foundation for possible bankruptcy fraud charges against the company at a later date.

One could argue that in the grand scheme of things, US regulators should have acted much sooner. Despite there being signs well in advance, I will say that these cases take time to build.

With the speed with which US regulators shutdown TelexFree, raided their offices, threw one owner in jail boned the other owner’s wife’s plans to leave the US, ongoing concerns over the pace of regulatory action in Brazil remain.

James Merrill, recently released on bail, has been left holding the bag after his partner-in-crime fled to Brazil. And at least one top promoter, who earned millions and sees himself as a victim, is also hiding out there.

Earlier this year it was hinted that the criminal case against TelexFree might be “resolved by mid-2014“.

With auditors Ernst & Young recently granted an extension to file their report though (due to the “complexity” of TelexFree’s business operations (read: fraud)), and then time granted for both TelexFree and the Acre Public Prosecutor’s Office to file replies, all of which then must be considered by a Judge before a ruling is made, that the case will be resolved anytime soon seems unlikely.

The end of 2014 might be more realistic, but with the ongoing fluidity of regulatory action against TelexFree in the US, even that might be a stretch.

Not helping the existing impression that regulatory justice in Brazil moves slower than a quadriplegic turtle, comes the revelation that the Brazilian SEC concluded TelexFree was “undoubtedly a pyramid scheme”.

Wait for it… all the way back in January 2013. [Continue reading...]


Herbalife continue to dodge retail in LULAC response

herbalife-logoMid last year saw a number of organisations write to the FTC and ask that they investigate Herbalife. One of those organisations was the League of United Latin American Citizens (LULAC), and they’ve remained at odds with Herbalife ever since.

“I’m mad,” said LULAC’s National Executive Director Brent Wilkes. “I’ve seen Latinos ripped off by banks and others, but this scheme really takes the cake.”

After talking with Herbalife “and not getting the answers I wanted to hear, I concluded they are defrauding upwards of 300,000 Latinos a year,” he said.

Another consumer activist planning to attend the meeting said, “We think the problem is getting worse, and we think that the FTC is really important.”

In attempts to appease LULAC of their concerns, Herbalife have since met with them on three separate occasions. Those meetings however appear to have achieved little, with Herbalife President Dan Walsh now penning an open letter , sounding a little frustrated at the lack of progress, now penning an open letter to Brent Wilkes. [Continue reading...]


Lead System Network Review: Gifting and recruitment

lead-system-network-logoThere is no information on the Lead System Network website indicating who owns or runs the business.

The Lead System Network website domain (“leadsystemnetwork.com”) was registered on the 21st of September 2013, however the domain registration is set to private.

Further research reveals Lead System Network affiliates crediting a Clinten and Ashley Aragona as the founders of the company.

clinton-ashley-aragona-arigona-owners-lead-system-networkAt the time of publication, there is no official Lead System Network marketing material that credits the Aragonas (right) with ownership of the company.

On her personal blog (see comment #4 below) , Ashley Aragona reveals

Clinten and I have always been in business together. He was an entrepreneur when I met him (cute story, but for another time) and it was quickly evident that we made a great team, not only as a couple in love, but a couple of business partners.

We’ve owned multiple businesses including coffee shops, fitness centers, and marketing businesses.

When I met Clinten, he owned multiple coffee shops and a fitness center. I knew of these because they were the brick and mortar businesses that he was known for locally. What I didn’t know was that he was also a network marketing beast and had been in the industry since he was 18, back in the days of ACN.

To keep the length of this down, I’ll fast forward through the next 5 years of marriage. We have been in multiple network marketing companies and have seen vast success, but also disappointment and failure.

Why this information isn’t included on the Lead System Network website is unclear.

In any event, read on for a full review of the Lead System Network MLM business opportunity. [Continue reading...]


Four Corners Alliance Group Compensation Plan v2.0

four-corners-alliance-group-logoWhen TelexFree abandoned its Ponzi scheme business model, Four Corners Alliance Group emerged as a popular contender for affiliates to join.

BehindMLM’s original Four Corners Alliance review was published in early 2013. After launch the opportunity all but died, only to be resurrected when one or more US-based TelexFree affiliates decided to pitch it as a reload scheme.

alexa-stats-four-corners-alliance-group-june-2014

Following a few requests via email to revisit the company, in light of purported compensation plan changes, today I thought we’d take another look at the business.

Read on for an updated review of the Four Corners Alliance Group MLM opportunity. [Continue reading...]


BeepXtra offering affiliates shares. Unregistered securities?

beep-xtra-logoBeepXtra launched in late 2013 and claim to be based (registered) in the British Virgin Islands. The company offers affiliates commissions revolving around fees paid my merchants to access their payment network.

The BehindMLM BeepXtra review was published in November of 2013 and I was contacted by BeepXtra management about it last month.

On May 14th Angelos Hadjiphilippou, BeepXtra’s IT Director, wrote

Hi there,

At first, i would like to thank you for a very honest review of our platform and service.

I have to admit, you got most of the points right, except some pricing and other minor details which we may have missed in the beginning, but overall a spot-on review. I’ve read other reviews about BeepXtra, both negative and positive, but yours pretty much covers comprehensively all the points.

Bottom line, i would like to extend a proposal for a re-visit. Reason being, and as i mentioned above, the minor points you missed or misinterpreted was due to our platform being relatively young when the review was made. I could personally answer certain questions if you wish and provide some further insides… Call it a private interview or whatsoever!

Wishing you all the best.

Angelos Hadjiphilippou
IT Director at Beep Xtra Ltd

Not interested in an interview (we see enough excuses for PR opps in this industry) but interested in making any corrections that needed to be made, I emailed Hadjiphilippou back requesting more information:

Hi Angelos,

Can you send me a copy of the compensation plan in English. I’ll go over it and decide whether a review update needs to be written.

If it’s just minor updates then I can update the original review itself.

-Oz

That was on May 19th and exactly as of today, one month later, I’ve since never heard anything back.

Now news comes that BeepXtra are offering their affiliates shares. Ruhroh… [Continue reading...]


Global Telecom Connect Review: 2 levels of recruitment

global-telecom-connect-logoGlobal Telecom Connect launched in late 2012 and operates in the telecommunications MLM niche.

Based out of the US state of Florida, Global Telecom Connect is headed up by CEO and Founder Randy Ray.

randy-ray-ceo-founder-global-telecom-connectIn his Global Telecom Connect corporate bio, Ray (right) is credited with being ‘involved in the Network Marketing (MLM) industry for close to 2 decades‘.

(Ray’s) impressive track record as vendors to the MLM industry eventually led him to launch their 1st network marketing company in October 2005; and to date, Randy already owns three very successful network marketing companies (including GTC) all of which are generating millions in monthly revenue.

The 2005 company mentioned is Fuel Freedom International (now known as “Forever Freedom”), who market ‘pills trade marked as MPG-CAPS, which are claimed to improve fuel economy, reduce emissions and increase engine power‘.

Jeunesse is the other company Ray launched in 2009, marketing a range of personal care and nutrition products. All three business share the same office space in Florida.

I can’t attest to the “millions in monthly revenue” claim, but at the time of publication all three of Ray’s companies remain in business.

Read on for a full review of the Global Telecom Connect MLM business opportunity. [Continue reading...]


Mannatech distance themselves from EmSquared

mannatech-logoPart of EmSquared review last week saw me call out EmSquared for their claimed “100% transparency”, but then failure to disclose that founder Sam Castor/Caster also founded their charity partner, MannaRelief.

As such the article was titled EMSquared Review: Mannatech charity opp spinoff? I thought that was pretty straight forward, seeing as Mannatech use the same charity. This information is available on the Mannatech website, although you’d be forgiven for missing it:

charity-page-mannatech-website

MannaRelief is an independent, nonprofit organization. It is not owned or operated by Mannatech, Incorporated.

Anyway, according to Mannatech, apparently we were “incorrect” in asking whether or not Castor’s newly launched EmSquared was a Mannatech charity spinoff.

Yesterday, purely by chance and out of curiosity, I punched in a search string that appeared in my website statistics report. On the first page of results was a new press-release from Mannatech, published some 9 or so hours ago (at the time).

What caught my eye was this line:

Mannatech (Ozedit: promotional waffle spam removed) announces today that is has no affiliation with a new company EMSquared, Inc., founded by Sam Caster who created Mannatech in 1993 and severed ties with the company in March 2014.

Other websites have mentioned Mannatech when discussing Caster and EMSquared, and one site incorrectly referred to EMSquared as a Mannatech spin-off.

Given BehindMLM was the only site to mention the MannaRelief connection, they’re obviously talking about us. Again, the headline clearly read Mannatech charity spinoff, so I’m not sure what the problem was there. [Continue reading...]


James Merrill out on bail

telexfree-logoKinda saw this one coming…

A federal judge has ordered that TelexFree Inc. co-owner James Merrill be released from detention while he awaits trial in the $1 billion fraud case.

Under the conditions of his release, Merrill, who was arrested in May, was placed in his wife Kristen Merrill’s custody and must live at his family’s home in Ashland. He is required to wear a GPS device, remain in his home every day from 8 p.m. to 8 a.m., and he cannot leave the state.

Merrill aos must put up a bond of $900,000 secured by his house, the home of his sister, Julie Merrill Wisell in Sutton, and another property in East Falmouth. He also must give up his passport.

Given the conditions that were proposed by Merrill’s own lawyers (most of which have been enforced as per above), I didn’t think there was much merit to keeping Merrill in jail.

On the other hand… [Continue reading...]


EmGoldex Review: 540 EUR investment scheme

emgoldex-logoThere is no information on the EmGoldex website indicating who owns or runs the business.

On the EmGoldex wbesite there is an “about program” section, on which it’s claimed:

The Emgoldex Trade Dmcc is registered in a certified free economic zone Dubai Multi Commodities Centre – DMCC.

The Emgoldex Trade Dmcc company is registered and obtains the licence in the free economic zone Dubai Multi Commodities Center for trade in Gold and Precious Metals all over the world. The company operates with the maximum profit for its customers.

Who registered the company however is not disclosed.

The EmGoldex website domain (“emgoldex.com”) was registered on the 19th of April 2011, however only “Emgoldex Trade DMCC” is provided as the registered owner of the domain. Who exactly owns this company remains a mystery.

As always, if a MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money. [Continue reading...]


TelexFree Trustee investigation begins, subpoenas incoming

telexfree-logoFantasies about a restructuring and return to business by TelexFree grow dimmer by the day, with news now that the TelexFree Trustee is investigating the company in earnest.

Filed on June 12th, Stephen Darr has asked Massachusetts Bankruptcy Court for permission to issue subpoenas on

  • PriceWaterhouseCoopers, LLP (former advisors to TelexFree)
  • William H. Runge (TelexFree’s Chief Restructuring Advisor) and his company Alvarez & Marsal (sic) North America, LLC (financial advisors to TelexFree)
  • Kurtzman Carson Consultants, LLC (TelexFree’s claims and noticing agent)
  • the law firm Gordon Silver (co-counsel to TelexFree)
  • the law firm Greenberg Traurig, LLP (co-counsel to TelexFree)

In addition to the issuing of subpoenas, Darr seeks to “obtain” [Continue reading...]