Police called in after TelexFree change old contracts
Despite the uncertainty over TelexFree’s ever-changing new compensation plan, those that had previously invested funds before March were reassured their weekly ROIs would continue to be paid out.
This made little sense considering the company was under SEC investigation, but was largely seen as a way to keep their existing investors happy.
I haven’t seen any official numbers, but TelexFree affiliates number in the thousands and there are purportedly over four million existing AdCentral investment positions active.
All was well until yesterday, citing “regulatory requirements”, TelexFree decided to renege on their earlier promises.
We initially thought new information circulating about the old investment positions might have been a TelexFree April Fools joke.
As more and more sources confirmed the news however, it became apparent that the changes were indeed going ahead.
As has been the trend of late, TelexFree’s latest announcement was devoid of any fanfare or formality, with the following message quietly appearing in the affiliate’s backoffice yesterday afternoon:
The worldwide launch of the new TelexFREE compensation plan is governed by a number of regulatory requirements. One of these requirements is that all Promoters receiving commissions must have personally enrolled retail customers.
To satisfy this requirement, certain Promoters must be ADFamily Plus Qualified with a minimum of 5 personal customers and have recruited and trained at least 2 ADFamily Qualified Promoters, one on each side of their organization.
Regardless of your qualification status, Promoters who have earned income exceeding the cost of their TelexFree99 wholesale package inventory, may use the balance of their back office credit for invoice payments using the pay with bonus function.
Additionally, TelexFree also shut off their payment system, prohibiting any affiliates from making withdrawals of their earnings.
As for the changes, existing TelexFree affiliate investors will be required to either sell or personally invest in five VOIP positions ($249.50 a month) and personally recruit two affiliates who do the same.
If they fail to meet these requirements, TelexFree will stop paying them their $20 a week AdCentral ROIs.
For those who had previously invested in TelexFree AdCentral positions and were hoping to just quietly withdraw their weekly ROI until their positions expired, the news must come as a pretty big blow.
Many of them had been persuaded to make significant last-minute investment by their uplines as compensation plan changes loomed.
As happened the last time TelexFree made official changes to their compensation plan, and with millions of dollars now on the line, a mob of furious TelexFree affiliates stormed the company’s Massachusetts headquarters.
Initially, a rather frustrated Steve Labriola came out to address them. Weary of his last address being published online, before speaking to the wall-to-wall crowd about the recent changes, Labriola requested people “turn off the cell phones”.
This was met by a firm chorus of “No!” from affiliates, to which Labriola responded:
Last time I addressed everybody, everybody went right onto YouTube.
At least one female affiliate in attendance can be heard to reply, “so what?”
So what indeed. Last time affiliates stormed the TelexFree office, neighboring companies in the building filed complaints.
This prompted Labriola to interrupt an “important” phonecall for a few minutes and try to persuade affiliates to vacate the building.
Continuing his address, Labriola then raises his voice to shouting-level:
The facts are everybody needs five customers. Two personally sponsored agents (affiliates) with five customers to withdraw your funds (and) to transfer your funds.
You can pay invoices all day long with that money, but we are a customer acquisition company – we need customers. So that’s what you need to do to get customers.
Affiliates immediately begin asking about the “old plan”,
Affiliate: That’s the new plan, what about the old plan?
Labriola: every plan, that’s everybody.
Affiliate: Why? Why you guys change it so quick?
Labriola: we need customers.
Affiliate: why you guys change it so quick? Why you guys change?
As another affiliate asks “hello?” and shouts of “what about the contracts?” can be heard, Labriola turns his back on the crowd and appears to briefly engage another group of affiliates behind him.
Towards the end of the video an elderly woman can be seen to approach Labriola and wave her finger at him.
The sore point with affiliates on the new changes is that, despite Labriola’s newfound insistence that TelexFree is a “customer acquisition company” (Gerry Nehra psuedo-compliance at work), what having to have five VOIP customers translates into for most investors is an additional $249.50 withdrawal fee.
From what I’ve read those with a large amount of funds invested will simply wait till their yearly ROIs have expired and then pay the fee to withdraw.
Those who have come to rely on TelexFree’s ROIs (making monthly withdrawals), are those who are going to be most unhappy with the changes.
Other than those with large downlines and/or a huge amount of money invested, they simply can’t afford a $249.90 monthly fee to access their returns.
What happens after Labriola’s announcement is unclear, but with affiliates refusing to vacate TelexFree’s office, at some point the police are called in to restore order.
Police responding to the scene arrive to an office so full that the front door cannot be opened properly.
Inquiring as to what is going on, angry TelexFree affiliates tell them “We are employees. They have our money, they don’t want to give it back!”
Another affiliate tells them, “not only us, lots of more people”.
Towards the end of the video police can be seen entering the office, presumably to talk to TelexFree management.
I’m not sure how much time passes, but with TelexFree corporate staff hiding out in the back of the office, the company then sends out top affiliate investor Santiago de la Rosa to address the crowd.
Flanked by police officers on either side, de la Rosa emerges as the officers warn affiliates:
Don’t be yelling. This is private property and you’re going to have to get out after he (de la Rosa) answers these questions, alright?
De la Rosa then steps forward and addresses the crowd:
Guys, I talked with Steve and asked him the suggestions that we have. And he is calling Carlos and they are talking, trying to figure out something, (so that) all of us can be satisfied.
But, this is something that they can not say right now “This is this!” They are looking (at) all of the suggestions that we passed through. I specified very, very clear.
They are going to let (us) know in the next, y’know maybe in the next thirty minutes, one hour. I think on the website, I think they’re gunna put something up on the website.
An affiliate then asks about the issuing of TelexFree 1099 tax statements to US citizens, to which de la Rosa responds:
Guys, a lot of people already receive their 1099. (Affiliate talking over de la Rosa: “We don’t want anyone to get hurt or arrested”).
A couple of us, we do not receive but we are going to receive it. They are working very hard to do that.
And I know that in this week…
One of the police officers interrupts de la Rosa at this point,
Is that the 1099 for last year? You should have that out by January 31st. You have to by state law and federal law. How come they didn’t get their 1099?
A stumbling de la Rosa tries to answer the officer,
de la Rosa: I, look, I, I not receive my one either.
Police Officer (talking to the affiliate who initially raised the issue): That’s something I’ll ask for you, okay?
de la Rosa: I’m told that all of us will receive our 1099 before Friday.
At this point Spanish-speaking affiliates mob de la Rosa with questions and concerns as police officers continue to look on. Eventually it becomes too much, with de la Rosa declaring
Guys, you make question to me (but) remember something: I am not the company, I am a promoter.
I just take all the suggestions and give it to them. Right now, I’m going to my house. I’m going away.
Despite de la Rosa drowning in affiliate enquiries and police officers openly questioning the legality of TelexFree’s business practices, nobody from TelexFree management materializes.
With de la Rosa directed by officers to exit back into TelexFree’s office, a police officer is left to address affiliates:
Hey guys, somebody’s going to have to get in charge here. Okay?
You need to organise and get somebody to get a lawyer in here. Understand your rights: This is labor, this is payroll, this is everything.
You need to get somebody in charge, you guys need to organise something, alright?
An affiliate then remarks ‘I think the best thing is to just see the attorney-general’, a suggestion the police officer agrees with:
Yeah, the attorney-general, call your state reps, state senators.
Another affiliate asks the police:
is there any chance you could get somebody to come out who is not a promoter?
The police officer bluntly replies,
none of them are gunna come out man, they’re staying in there. They see this many people, they’re scared.
Nervous laughter breaks out from some of the affiliates, with police then moving to evict affiliates from TelexFree’s office:
You can’t wait here, this is the thing: You can’t stay here anymore.
I mean this is what I’m trying to tell you: You need to organise, you need to get somebody to get a lawyer, a labor lawyer. You can’t just come up as a mass. It’s not going to work that way.
We’re hear to protect everybody, those people (the officer points to TelexFree management hiding in their offices), and you. We don’t want to see anybody get hurt.
Towards the end of the video one affiliate makes a mysterious request of the officer:
Affiliate: The guy, the guy that took off with a bunch of files in his car, did you guys track him down?
Police officer: Somebody has, the other officer is taking that out. You know what I mean? He’s made sure he has a picture of the plate, the uh Connecticut plates.
Why an individual fled TelexFree’s offices with “a bunch of files” when TelexFree affiliates arrived is unclear.
The video feed is shut off at this point, presumably with officers evicting TelexFree affiliates from the company offices shortly thereafter.
As this is a breaking story, please check back for updates as they occur (the comments below are a good indication of the current situation).
Bravo! Sheeple grew spines! (in more ways than one!)
Maybe we can say this is “occupy TelexFree”!
Every Ponzi & pyramid scam needs one of these events.
You also have to believe that more and more “investors” or victims are taking to the Internet to destinations like BehindMLM and PPBlog where they do their research. Even if they aren’t persuaded from their research to not invest, we can imbue them with lingering doubt so when SHTF, these victims will be much more aggressive in their response than scams of the past.
Also there may be victims who don’t find this site until after they’ve invested and they see warning signs. Instead of buying the company BS (like many did with ASD, Zeek, etc.) they will start calling BS much much sooner.
They still invested, but at least we are seeing progress.
They were speaking Spanish, not Portuguese.
Hey Oz. Here’s what I could note from CC’s latest vídeo, released today (youtube.com/watch?v=Cr2uh1nQSho):
After 2 minutes of blah blah blah and God this, God that, he starts saying that TF was “forced” (by who?) to adjust itself and that has impacted in the payments of the old contract, specifically the ones who had already get the ROI back.
He says, at 3:35, it was done to fulfill all the legal demands from several countries (meaning: we were Ponzi but we are trying/faking to be no more?).
He says that current comp. plan does not allow any misinterpretation and, regards saying thousands of times before that people “invested” in TF, he says now at 4:10 that “the company is not an investment option: we are not a bank, we were never one”.
CC says they want to prove to the world they are completely legal and do not need to use any tricks. He keeps saying TF is not an investment and who sold it as one is completely wrong. He says that in the current comp. plan people must have 5 VoIP clients and two other people on their downline with 5 clients each too (I just love his face when he lies).
He talks about how TF was never illegal but it is changing things due to everybody’s misinterpretation. Starting at 8:00 he says more than 250,000 people entered TF and they’ve sold more then 2,5 million VoIP accounts (to whom?), using more than 11 million VoIP minutes. He also talks about how the TelexApp is a success and that there was more than 350 downloads (he does not say it is daily or total).
After that, more blah blah blah about how amazing they are, about how many gifts people give him, how TF change lives (for worse?) and all that BSs. He finishes saying again that they aren’t and never were an investment option and that several other companies (scams, of course) are trying to attract TF’s promoter to their business (scam) ans that shows how valuable promoters are. He tells some more lies and try to motivate the scammers to pass the lies on.
That was the first time he says the phrase “not an investment” more than “God is good”. It reminds of “where is your god now”?
They were talking in either Spanish and Portuguese.
Looks like the wheels came off quick on this one.
So, in essence: the SEC will not have to shut down TF after all.. It will shut down itself due to not being so attractive now, LOL
Thanks for the correction.
@Diego (and others)
Thanks for the translations. I think I’ll just let it ride in the comments, you guys are far more accurate than I could be translating Portuguese :).
Meanwhile, what crack is Costa smoking?
Less than a week ago he puts out a “my best TelexFree investment strategies video”, and now he’s going to claim it’s not an investment?
Cue that video of Costa under oath, telling a court in Acre that “TelexFree is an investment opportunity” so the Public Prosecutor’s Office has no jurisdiction over the company.
My god… the bullshit from this guy.
As for who forced them to change? That’s obviously the SEC. Brazil shut them down a year ago and up until last week Costa was still proudly defiant, so it clearly wasn’t the Acre PP Office.
I wonder if any further action will be undertaken now that they’re obviously going to have thousands of affiliates demanding their money back. Police officers are advising affiliates to get in touch with lawyers, the Massachusetts AG Office and their state representatives.
Can’t wait to see the eReleases spam-release explaining how that’s actually a good thing.
IRS will be the ones that take them down
Loved this officer. He had no idea what Telexfree was but in a few moments of heareing what people had to say…had the best advice for the crowd.
Clearer audio of the police entering TelexFree’s office.
Additional footage of angry affiliates.
TelexFree affiliates trying to get management to come out and give them answers:
The guy speaking Portuguese says something like “do you know what an ‘orange’ is?”, refering tho the brazilian term equivalentt to “straw-man” (a person to whom title to property or a business interest is transferred for the sole purpose of concealing the true owner and/or the business machinations of the parties).
He goes on and says in some sort of broken Portuguese/Spanish: “beware of they using you as a stooge, do you know what that is? You are very important to the latin community”.
I wonder why CC prefers to release all his videos on Portuguese instead of English.
First of all, TF is banned in Brazil which makes these videos a lot more suspicious.
Then there’s the fact that English is a lot more common to know than Portuguese as a second Language.
Obviously there’s still a huge number of Brazilian promoters, but maybe this is a way to control the way the news spread. As in a Brazilian promoter is way more likely to share the news as a good thing or something like that.
Nice. Maybe now some authority take a real providence.
TelexFree subtitled James Merril’s recent “100% TelexFree” English video into Portuguese quick smart.
They’re quite capable of subtitling Costa’s videos in English but the reason they don’t is obvious. It’s the same reason compensation plan information and subsequent updates first appeared in Portuguese…
The only English information the company puts out are those god-awful spam-releases they pay eReleases to write for them.
Sidenote: If the 4 million AdCentral positions is accurate (and keep in mind that’s active and excludes expired positions), that represents over $1 billion USD flowing through TelexFree (monopoly money or otherwise).
The exact figure is $1.12B, making TelexFree easily the largest MLM Ponzi scheme to date. That is of course if the figure is accurate (sourced from top affiliate investors).
I guess we’ll have to wait for SEC legal documents to confirm as it’s unlikely TelexFree themselves will ever release this information to the public.
He actually did not get complete picture. He thought it was labor dispute.
My guess, a lot of it is Monopoly money. Can you remember ratio of (total money(monopoly+real)/real money) from previous ponzi busts?
Reactions from TelexFree affiliates on the new changes:
In Brazil, judge Thais Khalil from Acre accepted TF’s request to pay for the E&Y audit.
Cheers for that. With the recent tax payments it was clear the AG would have been granted the injunction anyway.
Costa’s just trying to stay ahead. Meanwhile I wonder if the experts will even get to finish their report?
Not likely if things keep progressing the way they are in the US.
Actually, what you can conclude from that is… IMHO “you are totally f***ed, you may as well f*** all the people who paid a bit longer and see if you can enjoy it a bit more.”
$800 million invested in real money
$3,000 million in VIP balance (monopoly investment)
$10,000 million total investment
Ratio: 800 / 10,000 = 8% real money / 92% monopoly money. But Zeek had DAILY reinvestments of ANY amount, rather than more random reinvestments in “units of amounts”.
TelexFree is a different type of Ponzi scheme with different types of investors
= less reinvestments than Zeek Rewards had
= higher ratio of real money invested
My guess is that the ratio of real money will be higher than 50% for the AdCentrals.
How people have paid for VOIP software and VOIP subscriptions will be a different story. Most people used monopoly money to pay for that part.
The man speaking to de la Rosa at 2:42 is also somewhat mysterious… I understand Portuguese, and I do not understand Spanish very well, but his speech reminds me of a native Portuguese speaker trying to speak bad Spanish. His first sentences look very Portuguese-like:
His next sentence is a lot more Spanish-like, but I was still able to understand:
Finally, his last sentence seems to be in Spanish, but there was a lot of noise, and I was able to get only the end of it:
Now, the translation for all five sentences:
By the way, “laranja” and “testa-de-ferro” are synonyms in Portuguese, and I guess also in Spanish. I got the translations “strawperson” and “strawman” from Wikipedia: http://en.wikipedia.org/wiki/Strawperson . Check the meaning there, too. “Laranja” also stands for orange, the fruit, in portuguese, so the man used the English word “orange” to remind de la Rosa about the meaning.
That man seemed to be warning de la Rosa about someone using him. Here’s the mystery. Who he referred to? The policemen? The hidden TelexFree guys? I didn’t get it.
However, I’m slightly on the policemen side. That man did not hesitate to say “orange”, because he knew even though the policemen would understand it, they wouldn’t get the real meaning he wanted to give.
The implication is that TelexFree management are hiding out back and sending out de la Rosa, clipboard in hand, to be the face of the company.
In English we’d say de la Rosa was a sheep sent out to face the wolves (Bible reference).
There’s no Carlos Costa figure in the US, Wanzeler and Merril never make public appearances outside of TelexFree PR events. Labriola doesn’t seem to be all that much higher up the information chain than de la Rosa (rememeber, Labriola claimed to have no idea there was an SEC investigation going on despite TelexFree being contacted almost a year prior by the agency).
Right, then that man really referred to the Ponzi crew behind that door. I just puzzled by his “mysterious” way to warn de la Rosa 🙂
I’m more curious about the figure mentioned who fled the scene with files when affiliates rocked up. Must have been something important if police officers snapped photos of the man’s license plate before he got away.
Maybe TelexFree thought they were about to get raided?
This is Eddy! Do you know any good lawyer for this matter?
I am the victim now and not the crook.
I hear Gerry Nehra is quite experienced in these matters…
Already taken!!?? Any second best!!??
His partner Waak?
This is what this all means minus the Telexfree spin and hehindmin drama:
You can withdraw funds if you been paid by Telexfree less than what gave to Telexfree. I know someone who did this today.
Everyone else can NOT withdraw funds even if they buy 5 accounts. I know some who did buy 5 accounts as directed by Telexfree, and they still could not withdraw.
Telexfree still real. Don’t hate
Thank you for sharing this information and videos. I cannot wait to sign up and start earning. It is so wonderful that you all put up videos and do all of the research so we don’t have to. Thanks from the bottom of my heart.
I come here often to get great news and videos so I can be educated about this wonderful company TelexFREE. Thank you so much!
I know of somebody who invested $50,000 yesterday
Why is this?
TelexFree has like… yknow, so many customers! eReleases said they sold a bajillion minutes of VOIP to Portuguese-speaking people. These poor people had to use pidgeons to communicate before TelexFree came along…
If you can’t withdraw more than you put in… sounds like affiliate investment is bankrolling commissions over retail sales.
We of course already knew that, but it’ll be interesting to watch TelexFree try to pin the changes on the SEC. They already pulled the “it’s us against the government” crap in Brazil – something tells me it isn’t going to work in the US.
Actually KT’s firm may be pretty good in doing these sort of cases? He’s first onboard with Zeek receivership info.
Even with the uncertainty of the new plan?
KT refrained from taking on any Zeek Rewards clients. I haven’t spoken to him about it but I believe the same will be the case here.
That and KT is working for iPayout, who handle TelexFree’s money. I don’t know the extent to which KT’s agreement with them extends, but I can see a conflict of interest in handling iPayout’s compliance and representing investors of iPayout’s clients to sue said clients.
I couldn’t help but notice that after the last month great effort to attract lots of money coming in per new investors pouring in to take advantage of the old plan, as loudly advertised, TF now has cash on hand, lots of it, has all of the sudden, very coincidentally, agreed to fund the auditing of their company as previously requested by Acre Justice’s.
When you consider another factor, that the 1099 for many of the involved still dind’t come, the new address in Nevada, I just cant help but to wonder if the audit team will find true data on the company records.
And again CC will go to Youtube to play the victim.
this review is very entertaining. now we need is the SEC and the FBI to get involved. eating popcorn while reading this and watch some youtube videos you guys posted.
Let me ask you a question. Sarcastic or anything like that…..
What do you think the people should do?
This is the Ponzi end-game we’re witnessing and my answer to that is the same as it is for those who ask before the end-game: I don’t give out personal investment advice.
I have no idea what you or any other affiliate should do. I just watch from the sidelines and report what I see.
Around where I live they are now talking about Juding and Wing network.
OZ, what can you say about wings network?
You’ll need to separate the different matters into two or more different groups.
* the changes in contracts
* potential tax issues
The new contract is probably illegal in itself, but so was the old one too. TelexFree is falling apart, so you will probably not need any lawyer to protect your interests (he will simply not have enough TIME to resolve any dispute).
“Potential tax issues” is about missing or flawed 1099-misc tax forms for the tax year 2013. You will not need any lawyer for that.
Before hiring a lawyer, you must first identify WHY you need a lawyer, and for WHICH purposes. I’m not able to identify any such purposes where a lawyer will be the right solution for individual promoters.
The advice from the policeman was a general advice. “You can’t resolve the dispute personally by meeting up here as a group of individuals. You will need to get ORGANIZED, e.g. hire a lawyer to represent you as a group.”.
Follow the advice from the policeman about “getting organized”?
“Getting organized” is NOT about hiring a lawyer directly, not about meeting up personally at TelexFree’s office. It’s generally about identifying solutions to the problem and communicate those solutions to other people in the same situation, and about making a few decisions.
* identify the problem correctly
* identify potential solutions
* communicate solutions
* make a few decisions
“Slow it down a little” should be your first decision.
“Identify the problem correctly” should be your second.
Search bar is on the top right of every BehindMLM page.
Because Telexfree is a ponzi. Didn’t you know? I thought you knew that.
Oh dear. The five people who legitimately bought retail VOIP services are going to be devastated.
Back to using pigeons I guess…
Update from TelexFree affiliate:
Are you THAT optmistic about TF selling VoIP services? Five clients (who are not scammers, I mean, “promoters”) seems a pretty high number.
I just looooooove how upset scammers are now. LOL.
BOSTON’s FINEST to the rescue lol
Oz, Excelent post!
It went out to the media today. Expect a publication soon! 🙂
Thanks for the information. It clarified some of the details for how it will affect people in different ways.
I have people who have 100s of thousands of dollars with Telexfree and yesterday their lawyer called Nehra and he told them he no longer works with Telexfree!
Obviously a self destruct ploy knowing the deep shit they are in everywhere…TXfree answer to all their problems, move the goalposts, change the rules and boom..bye bye txfree, lets keep all our cash and run quick
Well.. as this story unfolds… what i get from many friends here in Paraguay is that “TelexFREE is history, here is another company which pays waaaaayyy better….” and they refer to LUVRE.. which is a reforestation company which supposedly has been on the market for 14 years and just gone MLM since November… sounds familiar?? lol
I see so many people refer to telexfree as being in Boston but the location is a good hour away from Boston and its one of the most rundown and beat up areas in the state.
Rent on that office has to be dirt cheap which alone would have scared most people from trusting the company that supposedly is so successful but needs to open an office in Marlborough away from everything because they can’t afford to be in Boston.
Can we get confirmation of this? (TF affiliates, call up Nehra’s office and ask).
It wouldn’t surprise me if Nehra’s abandoned ship… and it explains why he was absent at the Madrid thing.
Forget that fantasy. Save your money and emotions for other things.
Its highly probable Telexfree ends up in bankruptcy or receivership (or both) in which case individual plaintiff lawsuits will be stayed….and eventually dismissed. Do you want to pay a lawyer for that? No, of course not. You may as well burn your money.
You are one of thousands, or even hundreds of thousands of people who appear to have been blinded by your own hopes, jerked around, cheated and lied to, so while you may be pissed off and want to do “something,” its not going to be possible.
If/when this falls apart a court appointed receiver or trustee will use his lawyers to represent your interests (and every other investor’s as well) You will not need or want your own attorney.
I have a new title for this history! What happens yestarday was a kind of
They confiscate the money of all people with no warning and no other option. Now you can know more about brazilian history!
I cant find anything about this company, can you please send me more details?
@Michel here it is..
one of my friends told me that it pays WAAAAY more than TF and you do basically nothing.. check it out.. it sounds stupid… BTW the site is in portuguese…
All I know is if this guy or gal hasn’t gotten a visit from the FBI yet, I would be very surprised.
I just wonder who’s going to be the scapegoat left holding the bag after it all comes crashing down and the dust settles.
I’ve been posting ads, but everyone who got into telexfree should have known to only us spare money. No one could really explain where the money comes from. Customers was the answer.
Think about it. Why were they paying me $600 per hour to post ads, which I never sold one program that I know of, when they could find thousands of people to stay at home and post ads for minimum wage.
You know the old saying,”if it seems to good to be true?” I got my money back plus some, but I can’t figure anyone not being careful here. I went in because a good friend asked me. I did it to help him. Oh well.
LOl! I think I commented a short while back about Nehra beeing seen from a distance quietly paddling his way back to shore in a tiny row boat as the ship sank.
Are they going to change the company motto from Fly Telexfree! to Brace for landing! ?
we all know the Telexfree will be shot down now or sooner. i feel so angry to see that most (95%) of these people involved in telexfree are hispanics/latinos because as always we (latinos) want to make fast money doing nothing.
This Telexfree issue is damaging the MLM industry. New York area is already suffering from this.
LATINOS WAKE UP AND UNDERSTAND now THAT YOU HAVE TO WORK HARD AND BUILD A NETWORK TO MAKE A LOT OF MONEY. NOTHING COMES FOR FREE. WAKE UP NOW.I AM SO MAD to see my ethnicity involved in all this.
The money came from people who invested after you.
They weren’t. They were paying you a return on your investment.
Getting paid to post ads and you depositing money with the company makes no sense. The spam isn’t of any value to TelexFree, your money is (so they can pay those who invested before you).
No existe tal industria ¿qué fabrica el MLM como industria? y no me digas que fabrica millonarios porque sabes que es mentira.
Esta “industria” como tu lo llamas está basada en la estafa a personas vagas y avariciosas que se creen el cuento de alcanzar la libertad financiera cómodamente desde su casa.
This industry doesn’t exists, what the MLM industry produce? and don’t tell me that it produces millionaires because you know it’s a lie.
This “industry” as you call is a scam based on lazy and greedy people that believe the story to achieve financial freedom from the comfort of their home.
Basically Telexfree is holding the people who signed up under conract #1 money’s hostage. They took their money with a certain agreement or in this case a contract as to what their “relationship” would be. You pay in this and perform this action and in return we will compensate you under these terms .
Telex can’t take their money agree to certain terms and then say, We decided to change the terms without your agreement and aren’t going to follow through with our part now until you follow these new requirements. Under this contract the people did not agree to the new terms. Telex has breeched the contract.
It also seems there is fraud involved in giving a date that anyone signing up before this date will be under #1 contract’s terms and then switching the agreement to contract #2 after taking the money. So in Telex’s rush to conform to SEC etc laws I think they’ve offended other laws and regulations.
Labriola’s statement, we are a product selling company and plan to be here for a long time shows an unbelievable blindness to reality when the very people that he’s breeched a contract with and are suposed to be selling his product are standing in numbers in his office revolting against the companies behavior.
Does he “really” think at this point anyone would do business with a company that lies and cheats the way they have throughout their short 2 year life? And the icing on the cake? The protesters were saying that they still had’nt received their 1099.
Even the police officer told the protesters that it was by law they should have received their 1099″s by January 31st and it’s now March. Tax deadline is April 15th.
So, in the end, Telex has changed many lives…. and small sample of the results were standing in their office yesterday.
While I appreciate that you think Telexfree should abide by a contract, its very likely the terms were illegal…. which would void the contract and make it uneforceable by either party.
Which is to say that you never had an enforecable contract with Telexfree to begin with. You only thought you did. Its a nullity.
Not to put to fine a point on it, but the law does not uphold your right to profit from a contract made for an illegal purpose.
TelexFree never was in the MLM industry. That’s another level of fraud it had engaged in. It had always been in the Ponzi scheme scam industry, under the cover of phone cards (provided probably by Wanzeler / Merrill).
You’re assuming that the contract is actually worth something; that the company will actually HONOR their own rules. With a fraudulent company, neither would be true… except when it suits them. And now, it no longer suits TelexFree to abide by their own rules. So, it’s f*** you all time.
Assuming you meant “only use spare money”, that is a very dangerous attitude to have.
Paul Burks, head of Zeek Rewards ponzi, yelled at a reporter who asked him if he had something to say to the victims of his Ponzi scheme: “I never told them to put in any money they can’t afford to lose”.
What most people don’t know is he was a professional magician. Yes, he do magic tricks: make stuff disappear and all that. And that’s exactly what he did with a lot of people’s money.
If you go into something EXPECTING to lose money, you’re clearly in the wrong business (and casino is NOT a business).
I wish BLGM has an office in CaLifornia I bet the members burn to the ground aswell as this one
The new plan is equally as illegal as before but with all the negative press it is probably tough to get new people invested and some people cashing out moving to other scams and fines in other countries.
They really need to add more funds somehow to keep it running and this maybe buys them a slight amount of time just to drop the investment term during SEC investigation.
This may sound crazy but could a ponzi ever or has one ever taken that money and create a real business and investment and afford to pay back all those that were in the pyramid and fines then simply run the real business?
Nope. Name’s tainted. YTB tried that with a rename, and managed to hang on for a few more years, but it’s dead.
If the company was in an industry that was actually profitable, why would it have to cheat / defraud in the first place?
Now, now, now… Posting potential threats like that is illegal under US Federal law. Stop it. NOW. You can wish them all get caught and sentenced to a thousand years or whatever.
It all started in Brazil (even though we are Latino as are Italians and French, we don’t relate with our Hispanic surrounding neighbors)! It only attracted less than 1% of the population and most of the population know it was a Ponzi scheme…..as I knew. I saw as pink sheet stock.
I don’t feel sorry for those who lost their house, because they are moron to think there is a quick fix!! When I went in, I was kind scared because I thought I was too late for the party and I was. I just got my money back!
Everybody that I brought in, I told them it was very risky business, as pink sheets! One of my friend that I brought in the old plan when into the new plan. I told him that it was too late, but he did not listen. He invested $6000.00.
I looked at some of LUVRE’s marketing material (in Portuguese, e.g. at slideshare.net), but without trying to analyse any details.
Deforestation and other “environmental programs” have been commonly known in European pyramid schemes and investment frauds some years ago.
They are designed to attract a specific type of passive investors = people who want “reflections” of some IDEAS they believe are “good”, which they can make money on simply by investing some of their own money.
MLM is about TRADE of products or services, not about investment opportunities. LUVRE is simply a fraud trying to attract money from investors and trying to attract recruiters doing the job recruiting those investors.
Non-MLM companies only go MLM in desperation. That would indeed sound quite stupid… or it’s simply a sound-alike scam.
I couldn’t agree with you more that this is an illegal contract to begin with but the courts can still order “releif” in some circumstances.
Telexfree can dress itself up in what ever it likes at this point. They’ve still orchestrated a world wide fraud to a level not seen. I don’t know what legal entity it will fall under but I highly dought that no matter what they morph themselves into that they will be able to walk away with anyone’s money.
As has been said here many times what happens today doesn’t erase two years of running a Ponzie scheme. Steve Labriola and the merry Telex bandits are going to hang on for life since the alternative (unless jailed) is going back to their cleaning business.
I wonder how all the Portugese working for them feel about them scamming their countryman. And I know they have Portugues staff since Marlboro Mass has a very large population of Portugese people.
WTF! I came across with someone who quit his 10 years job because he was getting enough money from TF. This person had no idea of what’s going on. I tried to talk to him he called me a “hater and a liar”
Sure its been tried. To an extent Telexfree has tried to do this with its Best Western Hotel. WCM777 did it with golf courses.
Countless other illegal schemes have used illegally obtained funds to invest in legitimate ways, partially in hopes of making a large amount of money for themselves, to legitimize thier activities or in some cases out of desperation, so as to to cover up what they have already done.
Apparently, speculating with other people’s money is pretty common. However, transitioning from a profitable but illegal business model to a legal one is not.
I guess…. I am going to follow Faith Sloan in her new adventure!!!!
Lucrazon Global!!!! I guess there is money to be made there, since I did not make money at telex. Please, people don’t bet your houses in these companies. It is just a fool’s gold!!! Nothing more.
I knew telex was in trouble when Facebook of Telexfree USA stopped adverting back in January. I guess they were the first one to jump out of the sinking boat!
Are you going to cover this event on April 12??? This is crazy! Powerful people is going to be there!!
Well I didn’t mean they would have an actual business that’s profitable in the first place but if anyone had taken all this money they are sitting on and created actual revenues on a different legal business or investment.
Having so much money they must be presented with actual real investment opportunities but I suppose that could be too much work for someone that believes they will get away with the money either way.
Anyhow I hope government sets an example with Telexfree and punishes them and those at the top to the furthest extent.
They are in shock and in denial, much like the relatives of the people on MH370 screaming at Malaysian officials, “They can’t be dead! Show me the proof! Give me back my _______!”
That’s true but the primary mechanism a receiver or trustee relies on to recover funds for an estate (and therefore its creditors) is through avoidance actions, i.e., avoiding contracts, leases, IOUs, general obligations, and/or the invalidation of fraudulent transfers.
There are situations that cry out for equitable relief but I have a hard time imagining this is going to be one of them.
That being said, no US agency has alleged, nor any court found that Telexfree is a ponzi or that the contracts are illegal and invalid.
So long as that remains the case, anyone can demand payment, engage in self help, and if need be bring suit against Telexfree for breach of contract.
Should a Receiver be appointed that course of action will, I believe be be foreclosed entirely because the Court will not permit payment to the early cohort of ponzi participants to the detriment of the estate and its creditors.
In your “opinion”. And I know you don’t have a crystal ball but I beleive you have considerably more knowledge and experience in the Ponzie world and historical cases than I do. I do have some law background but very limited. What do you think the next steps will be?
Please don’t tell me you think these owners, leaders and top promoters will be allowed to walk away into the sunset with their bag full of money.
I asked the exact same thing about Zeek Rewards when they supposedly were using 50% of all profits to pay affiliates to post useless ads on online classified ad sites which were already 99.9% Zeek spam, when it would be a lot cheaper to hire someone to buy banner advertising all over the internet and have greater reach.
Of course, it all came down to needing the affiliate money to pay off older investors.
It’s sad all this.. but I hope something good can happen this weekend.
The Lucrazon Mitt Romney thing? No, not unless something of interest happens.
I should be more interested in your opinion.
My take is that the world is shifting under our feet. Because of the internet these schemes are more brazen, faster, and far larger than would have been possible a few years ago. Law enforcement and the laws themselves have not caught up, but they will.
For now the Zeek Rewards case is worth watching because it will test the powers of a Receiver to go after the winners in class action fashion. My hope is that the Zeek Receiver has great success so that people learn and understand that they are not anonymous, that they can not act with impunity and that there are real world consequences AND PENALTIES for their recruiting actions.
I think the SEC and the Courts will be placing a great deal of emphasis on getting the Zeek Rewards prosecution just right. It can set precendents and act as a model for the future.
It may take years but eventually this scourge will be suppressed. Zeek is ongoing, WCM777 has just begun and I expect TFree will be next.
If I can read between the lines, the Brazilian authorities will attempt a US style receivership to deal with TFree. That’s good. Next The legislatures in all countries will have to modernize their laws to effectively deal with this type of cybercrime, and it will take a generation or more to do it.
Unfortunately for now, people are going to get away with things. Just as the good have at times suffered, the wicked sometimes prosper.
There were no illegal contracts. The terms of agreement (the contract you signed) says it can be changed by the company any time as well as the policies and procedures (how the company and distributors will operate) + The Complan…. so when you signed up with Tfree obviously the complan was the illegal part but you signed that they were free to change all!
BTW go back to Skybiz the Feds have a pretty fair handle on dealing with these scams but they are slow engaging! And yes I have proposed a SCAM OBSERVER CORPS OF VOLUNTEERS TO THE FTC SIMILAR TO “The Ground Observer Corps” in the 50’s watching for Russian Bear bombers. No action!
Why? Volunteers would take away from paid civil service staffing which is part of the (gasp) Civil Service Pyramid that gets the people at the top promoted to higher wages. Make Sense?
If the terms of the agreement implied a passive return then the agreement constitutes an investment contract.
An investment contract is a security. The sale of unregistered securities to the public is illegal even if the “public” chooses to ignore the illegality or is ignorant of the true character of the agreement.
The TF agreements are contracts made for an illegal purpose and are therefore themselves illegal.
Your describing a legal provision in an illegal contract. Its not relevant.
From one point of view, yes, but an all volunteer bureaucracy? You really must be kidding.
I agree. Whether or not the contract can be changed at Telexfree’s whim does not have relevance to the fact that the terms that where put forth when the distributors signed the contract were illegal.
A general clause like that can make the whole contract become illegal, if it’s being used incorrectly. A general clause will only cover minor changes or “improvements”, it can’t drastically change the meaning of the contract.
* a 52 week / $20 per week term can be replaced by something relatively similar, but it can’t be drastically changed.
* If the initial contract was illegal from the beginning, it should be terminated immediately + refunding the remaining value of the contract (what the promoter have paid IN for the remaining contract period).
* You can’t “legalize” an illegal contract by making changes to it. You can correct some minor legal issues, but not major ones.
You can TEST your own theory by looking at some of your own contracts, e.g. your insurance policy. The insurance company CAN make minor changes to keep the agreement more up to date, but it can’t radically change the meaning of the contract.
You can also look at the few occasions where contract terms CAN be radically changed. They are usually related to changes in laws, e.g. when Cyprus made changes to bank laws / tax laws.
The general rule is that changes can’t benefit one party at the expense of the other party, the changes will need to be related to something else than that.
If anyone was good enough to sell the telexfree as an actual product they should be in real sales not telexfree because that is one tough feat
I’ve been a very successful sales person for years. Sales is an art in itself.
I wouldn’t touch this Telex “product” with a ten foot pole. There’s no way a novice is going to sell this. The objections alone would be difficult even for a seasoned professional to over come.
The only value this product has is to create the smoke and mirror effect it was meant to.
And they’ve talked about selling coffee? What the heck is a communications company doing selling coffee? (its very hard to take them seriously).
I can see it now…Star Bucks offers a Telexfree brew.
demons all over why? police.
People have tried to sell it on eBay as “TelexFree air time, 3,000 minutes (etc.)”, in the price range $10 – $25 (net price for 1 month / 3,000 minutes was only $5 in “back office money”, so a potential sales profit would have been in the range $5 – $20 per sale).
I have identified SOME people selling it, e.g. a couple of people in the Gerald Nehra “blessing” video, 6 months ago.
Some people (one or two in the Nehra video) sold some subscriptions in their local Brazilian or Dominican Republic communities in Massachusetts, to people they already KNEW had relatives in those countries and frequently had contact with relatives via phone.
Sale isn’t THAT difficult, people are MAKING it become difficult by applying their own ideas (e.g. by comparing it to other VOIP services, or applying some other knowledge they have themselves but the customer doesn’t have).
In the Latino community in Massachusetts, I’m pretty sure people with local knowledge will be able to find SOME people who are spending more than $50 per month in telephone expenses to one of those two countries.
You’re competing against the solutions they already HAVE, not the solutions they potentially can get from a competitor. For SOME people, $50 for 3,000 minutes air time may look like a rather inexpensive offer. You will need to see it from THEIR viewpoint rather than from your own. THEY will compare the offer to their existing phone bill rather than to Skype.
I haven’t been able to find MANY promoters selling the VOIP service, but a few have most likely made a few sales.
I guess we should have clarified as “fraudulent contracts” as they are entered without proper disclosure or material misrepresentation was involved.
And nice seeing you here, Rod. This is one heck of a mess, and seriously ruining the name of MLM for tens of thousands of people around the world.
No a clause like that makes the contract voidable, not illegal. Two different things zupi.
i quick please return my money back. I am not interesting anymore, too many contracts changing without any notice. tat suck. no money able to transfer to bank any longer.
Oz , may you explain me why telexfree and other scam company keep changing compensation plan to restrict money withdrawal when they are dying. why not just close down right away and take all the money ?
As per Labriola’s quoted comments, they still believe US regulators have no problems with them running the AdCentral Ponzi investment scheme for two years.
So they’ve changed the plan and put a stop to the passive investment (well actually you can still passively invest, it just costs a lot more now), in the hopes the SEC will give them a “get out of jail free” card.
Sale isn’t THAT difficult, people are MAKING it become difficult by applying their own ideas (e.g. by comparing it to other VOIP services, or applying some other knowledge they have themselves but the customer doesn’t have
Most any product will sell a certain amount to a certain customer regardless of say, quality of product or the talent of the sales person. ( pet rock of the 70’s comes to mind.) In this case it would have been more a marketing campaign and word of mouth that created the massive sales. The product had a certain life expectancy and died out.
The voip product in this case has to much competition to create any real value to it at this point in an already saturated market. There’s not anything about it that makes it unique or desired over another product. Some sales may be made however how loyal is my customer going to be, meaning re uping their contracts to purchase and aslo creating word of mouth for me so I can build a sustainable business to make living at. Also, what “is” my compensation structure?
I think we can all agree that the original Telexfree contract agreement was nothing about creating a real buisness.
The reason marketing companies and sales people can make a great living is for the fact that sales “is” difficult. Certain sales personalities and techniques work in some product areas but not in others. A person who’s great at retail store sales may not be able to sell real estate, car sales, insurance…it’s endless but each requires a different approach.
Having never worked in the MLM business I can only draw from my own experience and what I think doing a home business would entail.
First a product you felt you could represent, present and be able to influence a purchase. A home business would take great discipline since you do not have the structure of a corp or other delgating tasks or sales goal targets. What systems will you create for your office and how you run your business. Home businesses are “very” difficult and that’s why most people fail at it.
It’s like people who say, I’m going to leave corp America and go start a bed and breakfast. (like it’s going to be a vacation that you make money on)
They do it for a year and want to sell. When you ask them,have ever had your own business before or have a background in the customer service industry? answer…”no, I just always loved staying in bed and breakfast’s so thought it would be fun” Ugh!!!!
Didn’t Amway and Excel Communications do this (ie. go from a pyramid/ponzi scheme to a real business)
The people who most likely made a few sales sold it to people in their own neighborhoods, people they KNEW had relatives in Brazil or Dominican Republic, people they KNEW frequently used landline or cellphone to call relatives and friends in those countries.
I don’t think they sold it as “VOIP service”, but as a method to reduce costs. They probably added some personal service to the sales process, e.g. helping people to download and install the software (getting the product up&go).
If they sold to family, they most likely sold it at a reduced price (the profit margin was 90% for the first month, before the changes).
* The back office training videos had SOME sales related instructions in a couple of the videos.
* We have found examples where promoters have been trying to sell the VOIP service on eBay, in the price range $10 – $25 for “3,000 minutes air time”.
But I don’t believe it will be EASY to sell now, when retail sale has become MANDATORY as a qualifier. It was POSSIBLE to sell before the changes.
it is no secret that this magazine has tried to do damage to Telexfree, Today I have completed my first year with this company and what they did was very good, they are protecting and ensuring that tomorrow we will have a stronger company.
After the change in March 9, is that I actually had the best moment and growing my business.
Telexfree Promoter. Francisco Sosa
But I don’t believe it will be EASY to sell now, when retail sale has become MANDATORY as a qualifier. It was POSSIBLE to sell before the changes.
Actually I don’t believe the comp plan would determine whether or not a product sells. If the product is not market competetive then your up that river without a paddle.
I supose we could talk the product and sales piece to death here but in actuality, It didn’t sell, won’t sell and will disapear into the product junk pile without even the giggles that go along with reminiscing about 8 track tapes.
When the sales force itself have no product confidence well….that’s when you turn your company into a Pyramid/Ponzie scheme….lol… or you just start out as one because you know that the product is a piece o crap.
As I said before, the game changed. You can still make the same amount of money as you did before. It is not about selling the VoIP. It seems that way…
It never was.
That’s what desperation smells like…
Let’s see: You “invest” $1425 and they guarantee a weekly payment of $100 for 52 weeks. That’s $5,200, which represents a 365% return on your “investment” in a year. No legitimate business in the world -no matter how good- can guarantee any type of payout, much less a 365% return.
It is clear that the payouts are coming from other peoples’ money who are joining the scam. I’m amazed how governments need to do an investigation first on such an obvious fraud instead of immediately shutting it down and then investigating.
It’s also amazing how some people are talking about this like it’s anything short of a scam.
Amway was always retail oriented ever since it managed to finagle a “settlement” from FTC back in 1979 (which got the entire MLM industry started). The pyramidal concerns are mainly due to the “Amway Motivational Organizations” which are sales teams that rely on recruitment, much like “lead generation” companies do previously for Herbalife. And Amway slapped them down hard when Dateline NBC and others called for another FTC investigation (which is why Herbalife thought it can do the same now).
Excel… Nobody cares about Excel now. It’s a nobody. In fact, didn’t one of their former heads got roped into TelexFree as a “consultant” the other day?
It’s no secret that TelexFree had always attracted shady people such as Sann Rodrigues, and did plenty of damage to itself. As the adage goes: leopard cannot change its spots.
Don’t blame others shining a light on the spots.
Hello Francisco, Welcome to the USA.
You’re to cute with your picture displayed and sticking up for your company. But I think your telling a Telex lie here….your accent is perhaps Russian or of another European country?
You’re actually posting here because you know this blog is very influential and could be damaging to your business? lol Your going to have to get more creative than this to win my friend. Best of luck with the Ponzie gig.
If telling the truth does any damage to TelexFree, I would suggest that is down to flaws in the way TelexFree is attempting to do business and not because of those telling the truth.
I seriously doubt any regulatory agency has ordered Telexfree to require five voip purchases amd require two sponsored affiliates. particularly at this point. Why would any regulator require anyone to buy into a ponzi scheme to get paid??? It defies law and logic…this is actually a demonstration of cash flow crisis pending, as predicted in a February memo!!!
I have seen back room lock-outs before and simultaneous program changes and it has always signaled a cash flow crisis.
The latest example is ShopGolden.net!!! It not only has cash flow issues and locked up the back rooms but continues selling and not paying “franchisees” (which by the way has no FTC required Franchise Disclosure Document).
By the way, the new program is now being sold as an “investment” that allows you to get your entire investment back plus a few bucks in a month!!! Sounds unsustainable to me!!!
To keep the minions from going completely ape shit, Telexfree would have them beleive, we want to give you your money but becase of SEC regulations that popped up recently (because they weren’t there when we first started this scam) we’ll give you access to your money once you perform these nearly impossible feats. (this way Telex isn’t claiming empty till or that pirates stole the money etc…)
So, Telex knows now that it has lost all credibility and can’t get any sheep to sign up anymore so no money coming in…what do they do? Come up with a product for the minions to purchase so they can unlock the door to their money.
The key is…..Telexautomation…like the “for a price we’ll post your adds for you” scam…Now they come up with “we will conjure up fake viop customers” for you scam.
So, I would think Steve Labriola would be all over trying to shut Telexautomation down since Telexfree is a customer based company with an Awsome product. Or, is it going to be like the Rwandan issue of “it aint us selling fake customers”…”they stole our name”
No sympathy for these people. This company was already shut down in Brazil before they opened up shop here in the U.S. Honestly what did they think was gonna happen?
Madjou is responsible for the april’s fools joke. He is from Guinea.
Will all of those old contracts be eliminated by a bankruptcy filing? Looks like a real stampede is forthcoming this week!
The contracts have effectively been eliminated already because Telexfree isn’t paying on them. Entering BK is the last thing the owners of this business want to do. As it is they can pay themselves and not pay you. Why would they want to do anything different?
Someone would have to force bankruptcy or a receivership on them which would be painful for everyone, though probably what’s coming.
I do not know where you are going to be stampeding to, but enjoy the trip.
thanks so much for the info to alert people world wide.As for people in Africa the online ponzi scheme is taking peolpe by surprise.
please inform me of SUCH KIND OF SCHEME THAT ARE GOING ONLINE SO THAT WE CAN HELP SAVE LIVES IN AFRICA.
I sent a dollar bill in an envelope 26 years ago. I’m still waiting for all those letters with dollar bills to come back to me.
Still wondering who the person was and what was in the envelope they drove off with. The police caught the license plate number I believe.
My guess is the envelope contained more cheques these scammers wrote to themselves.
That happened when the affiliates stormed the office. Maybe Craft had been instructed to grab stuff and flee at the first sign of trouble (feds, angry affiliates or otherwise).
If ICE had shown up, the crowed would disperse very quickly, an important aspect of all this that everyone seems to be ignoring. LOL.