British police issue TelexFree scam warning
TelexFree has recently been attempting to make inroads in Europe. In addition to heavily promoting the investment scheme throughout Russia, the company’s affiliate investors have also targeted western European countries.
Anticipating Europe to be a primary source of new investor funds with which to pay out existing investors with, TelexFree are even going so far as to hold their next conference in Madrid, Spain this weekend.
Fortunately all this Ponzi pimping hasn’t gone unnoticed, with at least one police department in the UK issuing a public warning against what they refer to as a “scam”.
In their scam warning, issued this month, the States of Jersey Police department warn
The States of Jersey Police have been made aware of a potential fraud which is targeting Jersey’s Madeiran community.
Guernsey Police have issued a similar appeal.
The scheme is under a company name of TELEXFREE and would require initial investments with the promise of big returns.
The scheme originated from Brazil and is currently being investigated by the Brazilian authorities as it is believed to be fraudulent.
Jersey Police know that islanders have been approached to “invest” in the scheme, but as yet have not had any contact from victims of the scam.
If anyone in Jersey has invested money into a TELEXFREE scheme they should contact the Joint Financial Crimes Unit on Tel: 01534 612250 (during office hours) or Police headquarters on 01534 612612 (at other times).
The last paragraph of the scam alert would indicate that the police are looking to gather information on TelexFree, perhaps for investigative use later should the investment scheme gain traction locally.
On their “About Us” website page, the States of Jersey police department write
The States of Jersey Police serves a resident population of nearly 98,000 people as well as over 700,000 visitors to Jersey each year.
At face value, the challenges involved in policing Jersey may seem to equate to policing a small town in the United Kingdom. But Jersey’s status as a Crown Dependency with its own government and legislation create a distinct policing environment:
The main difference is that the States of Jersey Police must be largely self-sufficient in developing and maintaining services that are provided through a local, regional and national level police service infrastructure in the United Kingdom.
Whether or not the department will take any further action against the company and any local promoters remains to be seen.
Footnote: My thanks to BehindMLM reader Frontier for providing us with this news tip.
Well… *technically* Jersey is a “British Crown Dependency” (one of the Channel Islands). Its citizens are technically NOT British citizens, so calling Jersey police “British Police” is stretching it a bit. How about just “European Police”?
Well.. *technically* Jersey is part of UK. How about calling Jersey Police, UK Police ?
My friend K. Chang.
I have lived, gone to school and work in both Guernsey adn Jersey CI and have family borne there and still live there. I Asure you that Jersey and Guernsey people have British passports.
They are still British and their police, military, prisons are British (Her Majesty Service) they unswer to the Queen direct instead of UK parlement. They are not part of United kingdom but are still British.
However the title does lead to most people to think it’s UK police as in Great Briton.
This notice should be also repeated in main land uk as there is also a lot of recruitment of telexfree there specially Portuguese speaking residents.
We’re testing my geography with this one… :). I saw those British police hats on their website, saw the bit about the British small town and went from there.
According to Wikipedia,
Is British Crown Dependency enough to relegate the police force “British police”? Otherwise what do they refer to themselves as? “British Crown Dependency police” is a mouthful.
Let’s focus in TelexFree. They are having a conference in Spain. My friend went to a conference in Dallas, USA last week. Brazil in trouble, Peru in trouble, British alert, the question is how long will TF will last?
Having in reference other systems like TF, how long did those systems last? and how long will TF last?
Jersey police. 🙂
I used “European Police” because they are indeed in Europe (even though they’re not a part of EU), and technically not a part of the UK either. I know, semantics. 😉
According to Wikipedia, it’s not a standard British Passport:
I know, technicalities. 😉
Not according to Jersey’s wikipedia page…
Worth Noting also that the nearby Island of Guernsey also same status as Jersey on relation to UK has also posted it’s own waring in English and Portuguese on the official Guernsey police facebook page.
I thought about that, but thought it might be confusing with NJ in the US.
“European police” are Interpol are they not? 🙂 (edit: Oh wait no they’re “international”)
Scotland Yard? ARGH!
“Jersey police dept. issue TelexFree scam warning”.
“Guernsey police dept.”, “Jersey and Guernsey police”
Madeira should be identified in a similar way, as “Madeira police” rather than as “Portuguese police”
Weren’t they referring to themselves as the “States of Jersey” on their website?
Many italian Telexfree’s affiliates are now taking fun of me couse they now speak about the fact its seem telexfree won the trial in Brazil.. is this thing a real fact?
How that could be possible? despite the fact telex now is totally changing his compensation plan (sounds a funny joke to me). Can someone explain to me the real situation about this?
The autor of BehindMLM is really a nice guy, but i read somewhere in these pages, he isnt that interested in talking about mainstream communication.. but please.. i cant trust totally no one but you.
Still cant belive telex won, sounds dodgy to me 🙂
Thx for every eventual answer, and sorry for my bad English
Never happened. Their upline(s) lied to them.
As for the comp plan, still waiting for it to be released. I think it’s going to be your typical “fake customer” qualifiers, with companies popping up selling
leadsemail addresses to affiliates to qualify.
Have to wait for official documentation to go public though. Faith Sloan put something up but the TelexFree police ordered her to take it down before I got a look at it.
Correct. The formal name is “States of Jersey”. The police refer to themselves as “Jersey-police” (“Jerseypolice”) on the internet.
I think I’ll just leave it as is and thank my lucky stars I don’t live there. Imagine having this conversation with someone everytime you try to explain how your country works.
Hmmmmm I’ve seen it on her site for days now and wondered why no one here commented on it. At the opening it say’s been shut down due to request of office staff of Telex. And since I know these people personally…office staff is …um two….when they talk about customer service??? there is none my friends….
Any how….I degress….I have her (sloans) page giving all the new compensation plan…I don’t know how to send it to you. You have my email and so if you want to help me figure it out I would be happy to spend the time to get it to you.
You can use the “Contact” button on the top right side.
Your Name (required)
Your Email (required)
Attach a file (10MB limit)
Misrepresentation or misunderstanding. TelexFree had a MINOR victory when a judge ruled that prosecution have to pay for the expert testimonies, because this is not a “consumer case”, where the company had the burden of proof to prove itself innocent.
The case itself had not gone to trial, and all the previous motions (well over a dozen) to dismiss, bankruptcy reorganization, appeal, etc. had been denied or dismissed.
But you know people… They don’t ever mention the negative things, but celebrate the positive. Not exactly healthy when it comes to “alleged” scam.
I’m From Madeira. NO Madeira Police is Portuguese Police.
Madeira is not an independent country or police force. It’s an Island and is part of Portugal.
Maybe if you want to be specific it would be correct to say Portuguese Police in Madeira. Like you could Say British police in London or in Southampton etc…
All that is going on here is spin – spinning a normal court procedure for this court as a win for one side gives people more reason to go out and recruit.
The wheels of justice turn slow, but never stop turning. If they had a leg to stand on (TelexFree), this would have been over long ago.
One can hardly blame the prosecutor for trying to lay the burden of proof on Telexfree but this is not a tainted baby milk kind of consumer case, therefore it needs to be handled in a manner consistent with what the state alleges it to be, which is an investment fraud.
Maybe now that these appeals have been cleared out, and the burden of proof has been determined things will speed up a bit.
“Nothing is settled permanently that is not settled right.”
Thanks for clearing it up. Good to get facts.
Regarding the inquiry in the Dominican Republic, here is what a TelexFree leader in Uganda is putting out:
Has anyone seen this alleged statement from the Public Ministry in the Dominican Republic, or better yet, anything that would contradict his claim? I’ve searched on this alleged statement and can’t come up with anything…
I am from the Dominican Republic. I have research everythign about telex free. Not true!!
I’m from Dominican Republic and the Public Ministry did not said that “TelexFree is serious, solid and legal”.
What they did said is that someone registered “TelexFree” as a local company (probably an Affiliate), and that they have not received any claims against that company.
However, that doesn’t mean that you can go and sue the company if you, for any reason, lose the money invested in TelexFree. Perhaps, those who registered the “TelexFree” name, maybe did it without an authorization from the main TelexFree branch in the US or Brazil. They only did it to deceive more Dominicans and make them believe that TelexFree has a local branch in the country.
Here is the picture (in Spanish) that some people have been sharing that says that the Public Ministry have not received any claims against “TelexFree” or “TelexFree Dominicana”:
Neither have I, which is why I haven’t published anything.
I’m not taking some letter Carlos Costa waves about as reliable, not after the Mapfre insurance lies debacle.
I didn’t think it was true! I couldn’t find any such statement online. In fact, quite the opposite-he expressed concerns that it was a pyramid scheme!
Apparently TelexFree International reps are misinterpreting, misconstruing, or misrepresenting what the prosecutor in the Dominican Republic said in an interview. Why am I not surprised?
How does anyone in TelexFree/TelexFree International interpret this to be an official statement that TelexFree is serious, solid, and completely legal? LMAO! Only someone delusional and ignorant of the facts would think that!
What the Dominican Republic prosecutor is saying is that at the time of this quote, TelexFree had been the target of an investigation in the Dominican Republic for about a month, that they have suspicions that TelexFree International is a financial pyramid like TelexFree was in Brazil, that at this point they are researching and attempting to get the answers to some important questions, that since the investigation is in the early stages they don’t have enough information yet that the principals involved in the Brazilian operation are involved in the opportunity being promoted in the Dominican Republic (they won’t be hard to find out-a simple search of their U.S. corporate filings will show it’s the same people involved with the exact same type of program as was being promoted in Brazil), and that until they find that evidence, there’s no need to communicate with Brazilian authorities, but that Dominican Republic and Brazil have an inter-country cooperation agreement, they have good collaboration, and if they find the evidence, then this channel exchange will fire, meaning they’ll initiate and do a joint intercountry investigation!
That’s what the Dominican Republic’s prosecutor’s remarks mean! At no time does he state that TelexFree International is legal-in fact, his suspicions are quite the opposite!
This is another example where TelexFree International reps extrapolate false or erroneous conclusions, either because they don’t understand what is being said, or because they simply drink the “kool aid” they’re given by their upline and decide to avoid the facts!
TelexFree/TelexFree International reps often misinterpret, misconstrue, or misrepresent what the judges in Brazil have said, what governmental officials have said, what the prosecutor in Brazil has said, so it doesn’t surprise me they would do the same in the case of the Dominican Republic prosecutor!
Of course they haven’t had any complaints yet! If you are getting paid a little something each week, you’re under the illusion you’re making money, so you’re not going to complain.
That’s the sneaky aspect of their Ad Central program!
It shouldn’t take any complaints for the prosecutor or Attorney’s General’s office to take action!
The same way TVI Express scam spread to various jurisdictions like Phillipines, Indonesia, and so on. Top affiiates register local corp, and TVI Express head Tarun Trikha sends his “blessings” and appear locally for conventions, never mind them being shut down elsewhere.
They were all eventually shut down or died on the vine.
In fact, I think i saw a TelexFree ad-vertorial in an Indonesian local paper the other day. WTF?!
Next, expect to see them win some bogus local ‘award’ or recruited some local celebrity (that they paid off).
Oz, Here’s something for you to analyze, on the new compensation plan Telexfree.
Oz, Aqui tem algo para você analizar, sobre o novo plano de compensação da Telexfree.
Emilio thanks for sharing that. Still going to wait for English so I don’t miss anything, but otherwise I see what looks to be
-a matrix of some sort (4×5, extendable to 4×7?), paying out 10% of the VOIP fee.
-binary commissions tied to recruited affiliate purchases of VOIP packages?
-another “residual” matrix paying out some commission from affiliates (not sure what)
-a “team builder bonus” that has something to do with recruiting five affiliates
-some other bonuses that don’t make much sense to me in Portuguese.
Have they gotten rid of the $20 a week AdCentral “spam the internet” ROIs or are they just calling it VOIP packages now (same positions, different name)?
Wow. This is just going to explode in the already users face. I know some people that will be really mad with these changes.
Will just sit back and look, this saddens me so much. So many people going in as we speak and they have no clue what will hit them.
Troy Dooly dropped some words on TelexFree’s new compensation plan. He says this change is the result of the entrance of two legal consultants in the case. Check the video:
(Ozedit: video already published here)
Oh, I didn’t notice it was already published. I’m just reading the comment now.
Zero credibility. Zero.
I thought the same, hoss. I just didn’t know you guys already knew about this video. Troy is throwing his credibility (if any) in the trashcan.
Sounds like a typical Mike Sheffield plan! (One of the 2 “experts” brought in-the other being Jeff Babener, guys who’ve been involved with more failed companies than any other 2 people in the history of the industry! I wouldn’t be too excited to see them involved-Babener I can understand to some degree having him involved.)
Anyway, a matrix is involved, and its a complicated, convoluted, hybrid pay plan that’s a disaster just waiting to happen! Would anyone expect anything less from Mike Sheffield? LMAO!
Good luck on the average person being able to explain it, let alone understand it! “Well, when you sign up, you get this, and then that goes in there, and then this goes into that, and that goes into this, and this is worth that there, and that is worth this is here, but in order to get this here you have to do that there, and to get that you have to do this. Understand?” LOL..
Historically, matrix pay plans have NEVER worked and been successful long term. Since the mid 1980’s when they first hit the scene and became popular, there have probably been at least several thousand companies launch with a matrix pay plan of some variation (2×12, 2×14, 3×5, 4×6, 5×7, 6×8, expandable-not expandable, forced-not forced, you name it.
And only one company has ever had any significant, long term success with a maxtrix plan – Melaleuca, and even they have modified their plan on numerous occasions in order to keep leaders because matrix plans are notorious for “breakage.”
Furthermore, regulators consider matrix pay plans gimmicky and they’re most often associated with money games!
I haven’t gone through the Direct Selling News list of top 100 MLM companies lately as far as what type of pay plan they use, but I’d be willing to bet that Melaleuca is the only one on the list, and if there are others, it would only be 1 or 2 more…
And Oz raises the most important point-the elephant in the room is the AdCentral packages…if they keep those, they’re in big time legal trouble, regardless of their changes, and if they don’t keep them, the program has just lost its main draw!
Hey Mike, nobody signed up in that deal to sell VOIP! There’s no money in VOIP when 1) most of your reps are only $5 for it, and 2) when most reps have no legitimate customers, and whatever customers they do have (their dog, their cat, their bird, their parents, their spouse) have only been put in as a means to collect commissions, and are probably only in their for a month or two…
Either way, they’re in trouble, especially in lieu of the investigation now underway in Massachusetts, and the guy going after them is the one who was responsible for getting WCM777 shut down in Massachusetts!
The question is how many people at TelexFree International are smart enough to see that! And based on the intelligence and common sense of those that I have interacted with, the answer is not many! The company will have their spin doctor create a story of how beneficial the changes are and the sheeple will drink it up like kool aid on a hot summer day! LOL!
@Hoss: LMAO! No kidding!
Speaking of forecasts, “Our forecast for Massachusetts on Wednesday, March 5th, calls for severe showers over the TelexFree office as the Secretary of the Commonwealth rains on the TelexFree parade, followed by extreme and violent, volcanic like eruptions coming from one Carlos Costa, tornado like activity taking place on the part of TelexFree lawyers as they attempt to keep the company from being shut down, and a blizzard of bullshit from corporate officials and top distributors attempting to create the illusion that all is well and that this is investigation is no big deal.
Expect a flood in terms of emails on the part of numerous TelexFree reps as drought like conditions on their income appear to be forming on the horizon. And now over to Chet for latest sports news!” LOL…
I didn’t recognize the name Mike Sheffield, so I looked at some of Jeff Babener’s videos from the TravelMax trial (Kentucky, 1997).
Mike Sheffield is (or was) frequently being used as an expert witness in MLM / pyramid scheme cases, to separate between legal / illegal. He’s “Mr. Product”, with experience dating back to the 70-ies.
TravelMax won the case, but agreed to make some changes.
Mike Sheffield seems to be one of Jeff Babener’s favorite expert witnesses, “the one telling the court exactly what Jeff Babener want the court to hear”.
In the 2 videos I watched, most of the defense strategy revolved around comparing TravelMax to Mary Kay, Shaklee, Amway etc., showing that they had relatively similar systems.
The MLM experts will most likely get SOME problems explaining the functions of the AdCentrals and the commissions derived from them.
“BLAME THE DISTRIBUTORS”
A part of the video revolved around the company’s OWN material, e.g. whether it had misleading income claims or otherwise gave misleading information to new distributors.
A strategy like that may potentially create reasonable doubt about whether the company have been actively involved in any illegal activity, or if the distributors are the ones to blame.
TelexFree should normally be a tougher case. The AdCentral is a contract that will pay weekly payouts for 52 weeks. It doesn’t have any functionality as a product, i.e. people don’t buy AdCentrals for self consumption or for retail sale.
Products and services simply don’t pay positive ROI. They may generate a sales profit but not a weekly income (daily, weekly, monthly, yearly income). Investments may generate profit or ROI, but products don’t.
AdCentrals could have been defined as a “marketing tool”, but that definition won’t fit either (into a business plan like they have now).
@Norway-It wouldn’t matter…the company is still liable for what reps say in the field, made even more damning when the regulators can show that the company didn’t take action against reps who made improper or illegal claims! (Regulators realize there’s always a few idiots in an organization who will say and do stupid things, and if you can show that you have policies and procedures which spell out what can and cant be said, and that you strictly enforce those policies and procedures, they typically won’t hit you too hard.)
That’s certainly not the case in TelexFree International. I doubt they even had a compliance department with which to take action against reps in the first place! And the company certainly can’t claim ignorance, that they didn’t know such claims were being made! One look online doing some searches or visiting Facebook and they could have seen the innumerable improper and illegal claims being made!
When determining whether scienter (a legal term) exists, a company’s actual business practices will be analyzed even if the company’s written materials display an intent not to violate the law. In S.E.C. v. International Loan Network, Inc., the defendant presented its written promotional materials that emphasized its penchant for fair dealing and conscientious business practices as evidence that it did not act with scienter. The court, however, rejected this evidence in favor of evidence of what the distributor force was actually presenting in the field!
So, they can try to either claim ignorance (a strategy guaranteed to fail) or they can try to pin the tail on the donkey (blame the reps), but that won’t fly with the regulators either…
I tried to analyse the strategy I could SEE in the 2 videos I watched. I only tried to identify WHAT and WHY (what type of strategy, and the intentions). I focused specifically on Mike Sheffield’s role as an expert witness.
I described him as “Jeff Babener’s favorite expert witness” for some reasons. He’s experienced enough to only look at “safe parts” of a program, and pyramid scheme issues will become almost invisible when Jeff Babener is asking his leading questions about a company.
I will analyse both strategies and potential counter strategies, e.g. TelexFree will be very vulnerable to some types of questions.
Understood…I happen to know both Babener and Sheffield personally…have had dealings with them before…To say I’m not impressed would be an understatement, although that would be more true of Sheffield and the people that work for him than it would be of Babener.
Babener and Sheffield go back many years and are joined at the hip…when Sheffield gets a consulting gig, he’s likely to bring in Babener, and when Babener gets retained, it’s not uncommon to see Sheffield come on board as a “consultant.” You scratch my back, I’ll scratch yours.
If Sheffield is the one responsible for the latest compensation plan, I’m not surprised. By the way, it looks eerily similar to the Zeek Rewards plan in a few instances, at least the Zeek plan that I last looked at…
Personally, I think they’re both swimming upstream in this case, but I’m sure they’re getting some nice fees for doing so!
I have looked at 3 more videos from the TravelMax trial (1997). Jeff Babener seems to prefer a very specific type of expert witnesses, all with very onesided viewpoints. They’re experts in repeating their own ideas rather than experts in handling multiple viewpoints.
I saw the same in how Gerald Nehra handled TelexFree. He focused on his own ideas about “movement of products”.
* TelexFree’s weekly payout was changed from $20 per week to 1 software per week, where the company would buy back the software product for $20. The idea is rather “constructed”, it’s a completely unnecessary process that doesn’t make any sense in business
* The AdCentrals got 10 software included in the price, to indicate product purchases. The software is downloadable and is installed when people sign up as customers or promoters, so the “movement of products” doesn’t really exist in reality. It’s a “constructed idea” rather than reality.
I’m pretty sure Nehra’s ideas made sense when he constructed them, but they didn’t make any sense when we looked at them. They only make sense if you share similar ideas, if you have a similar focus, if you strongly believe that “movement of products” will be a legal solution to a Ponzi scheme.
Jeffrey Babener’s favorite expert witnesses were experts in their own fields, but rather narrow minded. That’s a weakness rather than a strength for an expert.
A. Mary Kay, Shaklee and Amway operates like that
B. Those companies operate completely legal
C. So TravelMax must be legal too
I analysed Babener’s expert witnesses, and they all used flawed logical ideas like that. “Other companies are doing it, and they don’t have any legal problems, so TravelMax shouldn’t have it either”. What other companies are doing isn’t a definition for legality.
TravelMax actually sold a lot of travels, it wasn’t simply about recruitment. So the “not a pyramid” conclusion was probably relatively correct. But it clearly had some pyramid scheme issues that were indirectly reflected.
Jeff Babener’s expert witnesses seems to be very experienced in several different ways, e.g. in looking at problems from a specific perspective and make that method look like the correct one. They may be vulnerable to questions about their own methods and perspectives, e.g. if anyone brings in a different perspective.
“Perspectives” are about
* from the viewpoint of the company
* from the viewpoint of the participants
* from the viewpoint of the law
* from the viewpoint of the expert himself
The expert witnesses typically covered some of the viewpoints, but they didn’t cover all.