Acre PP: TelexFree under investigation in the US
Over the last few days a veritable sea of information has been released pertaining to TelexFree’s sponsorship of the Bazillian football club, Botafogo.
Patrick Pretty’s covered the Botafogo story and subsequent fallout with their main sponsor, Viton 44.
This morning the latest on the Botafogo story comes from Alessandra Marques, of the Acre Public Prosecutor’s Office:
Botafogo could be harmed by accepting sponsorship from Telexfree, now accused of being the biggest financial pyramid the history of Brazil with warnings issued in at least two more countries.
According to the prosecutor Alessandra Marques, responsible for the action that blocked the deal in Brazil, the freezing of assets of members of Telexfree can, in theory, include funds from the contract with the club, even if the funds are held external (to TelexFree).
As interesting as it is to watch the prospect of Acre seizing TelexFree investor funds transferred to Botafogo develop, of far more significance were comments made by Marques on US radio.
Speaking on Boston’s “Vem Viva” radio station (650 AM) about the Botafogo sponsorship fiasco, Marques revealed that
the governments of Brazil and the United States are already in contact to investigate the actions of (TelexFree) in the United States.
Marques noted that TelexFree run the “same operation” in the US as they do in Brazil, and as such
the U.S. government can intervene and prevent (TelexFree) from continuing operating in (the US).
Unfortunately Marques stops short of going into specific details about the US investigation into TelexFree, only stating that
I can not say give details (as) this is a sensitive issue, but (I can confirm) that an existing investigation is already happening (in the US).
What I can say is that the American government takes a much stricter view on (Ponzi) criminals than the Brazilian (government).
In a phone conversation with Globo, Marques did however name the IRS “in addition” to other US regulators as being part of the investigation. Whether or not the SEC are involved is currently unclear.
It should be noted that its standard procedure for US regulators to make no comment on investigations until they are concluded (and only then if further action is taken).
In the meantime though, now that a US investigation has been confirmed it’s probably going to be a matter of counting down the days until regulators make their move.
As in Brazil, TelexFree’s business model has it accept $299 deposits from affiliates on the promise of a $20 a week ROI for 52 weeks. The company also pays affiliates directly based on how many deposits recruited downline affiliates make via a matrix.
How this will be seen as anything but the sale of unregistered securities by TelexFree remains to be seen.
TelexFree are currently registered in the US state of Massachusetts. Back in November 2013 Massachusetts’ SEC division suspended the operations of another Ponzi scheme, WCM777.
WCM777 responded by “shutting down” their US operations and fleeing back to Hong Kong. Shortly after they confirmed they were indeed guilty of selling unregistered securities in the US.
Just a few days ago WCM777 announced they were changing their name to Kingdom777, along with plans to return to the US and “register with the SEC”.
Are TelexFree next on the Massachusetts Ponzi chopping block?