SEC TelexFree investigation began in April 2013?
Despite Steve Labriola, TelexFree’s International Marketing Director, promising affiliates that “if there’s something going on we’ll let you know,” at the time of publication the company has failed to make any official announcement on the Massachusetts investigation.
Fresh from partying it up in Spain, Monday has all but come and gone in the US and nothing has been communicated to TelexFree’s affiliate-base. Well, nothing official anyway.
According to one Brazilian TelexFree affiliate, who had a “private meeting” with company owner Carlos Wanzeler at the recent Madrid bash, turns out Steve Labriola might be telling porky pies.
In a blog post subtitled “Carlos Wanzeler reassures everyone about the SEC investigation”, TelexFree affiliate Marcondes Domingues writes
I and my friend Fabio Fernandes had a private conversation with Carlos Wanzeler about the new compensation plan and on investigations in the US.
Wanzeler made it clear that the current plan is not outside the law, but (that it) draws attention no world market is prepared for the size (of the) gains (TelexFree pay out), and that creates suspicion in some countries. (This results) in the inevitable requests for documents and clarification, which is bad because the media report on these investigations.
In April 2013 the SEC requested documents which were delivered to them (by TelexFree) within the allocated timeframe. This happened again in last January (2014), but this is a normal procedure.
Domingues claims that Wanzeler “has no concern” with the SEC investigation.
First and foremost, April 2013?! And you’ve got Steve Labriola running around back in January telling affiliates
There is no investigation started or presented to TelexFree in any shape or form. There has been no initiation of an investigation.
What a crock!
With the SEC having contacted TelexFree for documents back in April, that means everybody in management knew they were being investigated. I find it hard to believe Wanzeler is having “private meetings” with top Brazilian affiliates yet his own International Director of Marketing has no idea of a US investigation.
The second request for documents in January appears to be behind the subpoenas ordering TelexFree officials to appear before the Massachusetts SEC this coming Wednesday. Unverified reports are claiming those issued with subpoenas to appear include TelexFree co-owners James Merril and Carlos Wanzeler, along with several top affiliate-investors.
Long time readers of BehindMLM will note the startling similarities between Wanzeler’s response to the SEC investigation and that of Zeek Rewards’ management, who infamously claimed an SEC investigation was part of “normal business operations”.
Following the revelation of a Zeek Reward’s regulatory investigation, affiliates, acting on information supplied to them by management, were claiming
the regulatory investigations were going to be “the best thing that could happen” to Zeek, (the company will) pay a minor token “admininstrative fine” that (the investigation) was just “standard business practice” and “nothing to worry about”.
Just a few short weeks later, the SEC shut down Zeek Rewards and filed court documents revealing it to be a $600M Ponzi scheme.
TelexFree have been accepting $289 from affiliates for investment positions on the promise of a $20 a week ROI for 52 weeks – for almost two years. Does anybody really think this SEC investigation is going to end well?
Well, one of the top promoters in my country wrote me that ‘they had won in Brazil and that even the laws were going to be changed’…and of course that I could still get a position in his team.
Then again, months ago, when the same guy told me ‘they’ won an appeal in Brazil, he was to send me to documentation on it..guess it will come at the same time as the change in laws. 😉
If anyone’s wondering about the length of the SEC investigation, I’d guess the Brazilian legal action had something to do with it. Perhaps even resulting in the US putting their own investigation on hold.
This is evidenced by the communication between Brazilian and US regulators, as revealed by Alessandra Marques of the Acre Public Prosecutors Office.
What they probably weren’t expecting is the effort (via filing of countless appeals etc.) that TelexFree would put into wasting the court’s time. Now it seems they’ve had enough and have restarted their own investigation (starting with the January request of documents to see where things were at).
Oz:
I doubt the SEC is on hold-in fact, there’s a 1999 agreement between the FTC and DOJ and their regulatory equivalents in Brazil, and if anything, based on that agreement, the SEC would be investigating at the behest of the DOJ…especially if such an investigation had been requested by the Brazilian authorities, which the U.S. would be bound to conduct per that agreement.
It is likely that the U.S. Secret Service, which is in charge of financial crimes, would be looking into matters related to money laundering, bank wires, etc; the I.R.S. for obvious reasons, the SEC for obvious reasons, the FTC for obvious reasons, and due to the sheer scope of the investigation, having a number of agencies involved, and considering the numerous countries that TelexFree International has permeated into, that it’s going to take a considerable amount of time to put together a rock solid case where they could hammer them on a number of issues.
My best guess would be 6 months, maybe 6-12 months…they could pop them on some easy charges within a matter of a month or two if they wanted…the statements of “guaranteed income,” “guaranteed profits,” “investment,” “return on investment,” etc. would be enough for the SEC to hit them right now on securities violations, and shut them down, which is likely the approach Galvin will take in Massachusetts against TelexFree International…
Brazilian authorities filed 40,000+ pages of evidence against TelexFree in court, perhaps the agency was co-operating with them (the April 2013 document request) and now this is their own investigation.
Acre PPs filed their motion for an injunction in June 2013, two months after the April SEC documents request.
Hard to say without confirmation, but I guess we’ll find out when court documents are filed.
@Oz:
Oh, I’m sure there is a joint investigation taking place between the U.S. and Brazil at this point. Brazil could have requested such an investigation, which the U.S. would have been bound to honor. As part of that 1999 agreement, there is a “positive comity” clause which calls for the sharing of information between both sides.
From a U.S. perspective, due to sheer potential size and scope of the investigation, and the numerous agencies that likely would be involved, it’s not surprising that it would take a long period of time before U.S. regulatory and law enforcement agencies would go public and/or take action…perhaps a year or longer…
@Smart lady:
Its amazing how TelexFree reps erroneously extrapolate from what they read and then reach incorrect conclusions.
Your friend is probably referring to the recent litigation concerning who was going to bear the burden of proof and pick up the tab in the case…the judge decided that the government would, and the next thing you know is TelexFree reps are running around proclaiming some major legal victory! LOL…
Uh, newsflash! If found guilty of being an illegal pyramid scheme in Brazil, highly likely considering the prosecutors had demonstrated enough burden of proof to get the company shut down back in June of 2013, and to date TelexFree has lost 14 different appeals to have their original injunction against them lifted, the judge will hit them with fines that will more than pay for the cost of the trial, so whatever victory they think they got is only temporary and rather hollow…
And yes, there are new laws pertaining to network marketing in Brazil being contemplated and/or implemented, and TelexFree was the impetus for that legislation! LOL! Gee, nothing like taking credit for something that was done because of you! LOL!
TelexFree reps must seem to think that this new legislation is going to legitimize pyramid schemes-wrong! LOL…TelexFree reps are still under the illusion they are a legitimate network marketing opportunity-that’s the fallacy!
It would be interesting to know how many of the TelexFree reps do reach “erroneous conclusions” and how many know exactly what they are doing.
I would imagine the numbers would be much different in Brazil and the U.S.A.
And any one remember what happened after North Carolina demanded documents of Zeek? 😉 (And who said “it’s no big deal”?)
It’s called “motivated thinking” (which is a nicer way of saying “wishful thinking”)
how long the telexfree close by law? or Maybe next year or next month telexfree was close by the world?
If this meeting with William Francis is true and they don’t shutdown Telexfree. I will have to change my mind and join Telexfree.
If the authorities knows about this scam and is not doing anything about it than why not join them and make some easy money. 300% for posting ads nowhere.
@Raffy
If you’re looking for an objection you won’t get one from me. Why wait for an SEC verdict? You already know it’s a Ponzi scheme and don’t seem to care.
Go nuts, invest all you can.
Why put money into a timebomb merely for the CHANCE of taking more money out? Are you an adrenaline junky?
I have not seen anyone that benefited themselves in these scams get punish. Williams Francis failed to punish San Rodrigues in 2004. Now we have him back running a bigger scam.
The people who creates these scams should be put in jail, otherwise there is no reason to follow the law. Also the people that joins these type of scams (Members) should also be punish with a fine, otherwise they will always be playing the victims rule.(I didn’t know this was a scam)
The perps are not spending time in jail because not enough of victims complained.
Madoff’s victims complained. They are some of the most powerful people in the world, and look at what happened.
And Zeekheads did little if any complaining. Instead, they are being lead by some (unnamed, you know who you are) into yet more money making schemes, or donate to “defend” Zeek, and so on. Zeek heads need to speak up, and complain loudly ANY TIME they see ANY of the people who introduced them to Zeek and complain loudly.
Scammers start small. Kettner was in TVI Express. Napier, Gilmond, etc. were in Ad Surf Daily. Sann Rodrigues was in Universo FoneClub, etc. Don’t let them learn how to make their scam more sophisticated. IF you are victimized, complain LOUD AND HARD. Shame only gives the scammers more fuel to scam more people.
@Raffy,
You’re right! But I don’t think the ponzies of the past were as vast as Telexfree, Zeek etc.. or as prevalent as they have become. The internet has opened the world to these shysters.
And yes San got off with little more than a slap on the hand but I read that since a lot of the investers were not necessarily in the US legally they were affraid to step forward. (again, that was in 04) Now ain’t that convenient they prey on people they know won’t be able to go up against them.
Why did Telexfree go into Dom Republic and Haiti? Do we really believe the people of Haiti want to start selling over priced voip to one another? They are a very poor country.
They are people in need and who are fed a dream. Of course they would welcome the opportunity to make some money. That’s understandable. But it’s morally despicable that flashy USA faux businessmen take advantage of their plight. Are they “real” men? I think not.
People that live in Mass that have invested in Telexfree should be in front of the SEC office building tomorrow to let them know you want justice. The next day you should be in front of the fake office building in Marlboro Mass. Enough of letting these crooks take advantage. Write letters, and emails. Instead of letting the Telex top dogs keep the money, demand they give it back to the people that put their trust in them.
Do people really want to let these guys ride off into the sunset with a martini in one hand, a cigar in the other with saddle bags filled with your money? I have great faith in Mr. Galvin.
For those reading this blog from other parts of the world? The people of Massachusett are a strong breed. They have the “spirit” of America USA in them. And they stand for pride, fairness, and justice. I think Mr. Galvin will get the job done. : )
I’m taking a day off and ….going to mass tomorrow. I’ll let ya know how it pans out.
Hey guys this blog has really hit home in the Dominican Republic regarding telexfree, I’ve in the past few days newspaper articles few warning people to be very careful with this company, and giving out information that you guys publish almost on a daily basis.
I commend each and every one of you for keeping us inform on this soon to collapse PONZI, unfortunately I have family members involve that never listened to, and told me I was crazy. The sad part about this is that most people know its a ponzi a yet they go blinded by greed.
Thank again guys tomorrow should be a very interesting day.
Speculation,behind mlm never give up and telexfree will grow more with the new changes just the website is worth like 8 billion dollar.
So for the haters this is the last oportunity to join the old plan and make the 100 weekly, something you all should done it in 2012
An article from Milford Daily.
State investigates Marlborough marketing company
(Ozedit: see here)
Who is William Francis & Oz, American legal system and regulatory agencies would NEVER work that way. They cannot leave their own people vulnerable to be victims for a year+ to allow another country to first protect its citizens!
@Shy
Well they first got in contact with TelexFree in April 2013. That was before Acre took them down so perhaps, and working with Brazilian regulators, they’ve been building a case since then.
@Dorothy
What did you find out? I am not in Telexfree but i have no problem with it. People are cruising good machines from it., Just that I don’t gumble.
This shitty fraud do NOT “won” anything! Morons on Brazil are migrating to USA TelexFree servers just to “avoid” Brazil justice. Those morons (reps) are called in Brazil “zombies” because they are just too much stupid and keep repeting “fly TelexFree, fly…. I won much money, money… I get rich, I bought a BMW…. all ppl envy us… we’re the best everybody else sucks”
Today is March 13
Telexfree had their big meeting in Downtown Boston last Sunday March 9th
So far I see a lot of talk here, but has anyone lost money?
Is there anyone to file a real complaint ?
If its a scam it really looks like the best scam ever, because “Everyone is getting paid every week…”
My Best for all!
The best scams are the ones where people will repeat the ideas they already have and convince themselves about something.
“Everyone is getting paid every week…”
Zeek Rewards worked great. People repeated statements like that over and over again. They even nominated and voted for Dawn Wright-Olivares to become “MLM Leader of the Year 2012”.
Here are some ideas you can use:
“Life changing opportunity”
“the evil gub’mint”
“big telecom companies”.
“We’re bound to win and we will definitely win”
“Proud to be a TelexFree promoter”
Just goes onto show what sort of blinders TelexFree folks have on in Brazil… Apparently some affiliates are claiming “victory” when Judge Khalil “reversed a lower court judge ruling” and formally removed the public defender from the case.
The reason is actually that he ruled the company is the one that’s in trouble, not the promoters, thus public defender is not needed to represent the promoters.
http://www.ararunaonline.com/noticia/8777/telexfree-blogs-nao-especializados-em-noticias-causam-confusao-ao-divulgarem-boatos-e-informacoes-imprecisas
Gotta love that logic!
Well, actually it does make some sense. I would think the court has to find that the company is acting illegally first. Once that is determined, then go after the promoters.
And anyway, why should the taxpayers foot the bill for the vary ones that scammed them out of their money. Let the schmucks pay for their own defense.
Ah, a name of great historical significance in Massachusetts.
Didja pay the $164 to get in — you know, to become a TelexFree stage prop during the free simulcast in which a pitchman named Jay tried to sell credit repair while talking about his ride on a “private jet” with other TelexFreeers from the Dominican Republic to Haiti?
I thought it was a bizarre mix of conflicting images. What did you think?
These talking points didn’t work for the Zeekers.
Yes. Any district attorney or state or federal prosecutor can file a complaint in the name of the people they represent, including people who perhaps happen to be in the process of getting their immigration/worker residency paperwork in order.
Ponzi schemes are per se fraud. A good number of them target vulnerable populations, including immigrants who are very reluctant to interact with law enforcement.
These folks, vulnerable as they are, may have friends and relatives who are equally vulnerable. When a company becomes a subject of an investigation, the fear may spread across entire communities.
Not only are the folks worried about a loss of money and how that will affect their standing across their communities, they’re worried about losing a new way of life in a new land.
It’s one of the reasons affinity fraud is so abominable and why regulators pursue such cases with great vigor.
I thought it strange that TelexFree management used Sann Rodrigues, a man associated with affinity fraud against the Brazilian community, as a headlining pitchman. What did you think?
And is Sann now joining Jay in selling credit repair between rides on a “private jet” to the Dominican Republic, Haiti or elsewhere?
Perhaps 30,000 people or more are channeling former Zeek pitchman Scott Miller’s “everyone is getting paid” line in TelexFree.
Let’s see. The folks have been told that sums from $289 to $15,125 sent to TelexFree will virtually triple or quadruple in a year. This is truly odd, given that the banks and processors TelexFree uses can’t provide anything that even remotely resembles that return.
And yet TelexFree, which is dependent on the banks and payment processors, somehow can — as if by the Zeek-like magic of placing promos on classified-ad sites.
Business, we’re led to believe, is so good that U.S.-based TelexFree can sponsor a soccer club in Rio, apparently by reaching out from the United States after its operations effectively have been halted in Brazil.
And TelexFree also can afford to pay for a “private jet” and shuttle it from the Dominican Republic to Haiti, where giddy reps engage in some high-fiving.
Elsewhere, TelexFree execs engage in group hugs and open the stage to a credit-repair pitchman — after these trips on a “private jet” and after certain TelexFree reps or guests get shuttled around in limousines and experience the royal treatment in, say, Spain.
It wouldn’t sell as fiction, which is just another way of saying, “It really looks like the best scam ever.”
PPBlog
P.S. “Ponzi schemes and private jets are like peas and carrots.” — Forrest Gump, 1994. (Just kidding.)
Why were the promoters accorded a public defender (an attorney) in the first place? They were never in jeopardy.
However recent rulings have confirmed that this is a non consumer case. Perhaps when they had “consumer” status they had the right to be represented and now they don’t. At this point they are participant/investors in a large but run of the mill ponzi not “consumers.” They can hire their own attorneys!
@hoss
Be interesting to know if it was court-appointed or some top investor pushed for it. Zeekheads tried to pull the same crap in the US (we need our own Receiver to look after our winnings), as you know it didn’t work.
I see what you mean and I agree. One might characterize the court appointed attorney’s role as one of advocate rather than as a “defender” since the promoters at this point are not defendants.
What puzzles me is that the appointment was approved, only to be subsequently denied. That’s why I postulate that the recent consumer vs non consumer ruling had something to do with it.
In any event I don’t see how this is a positive for the promoters.
Had to do with the scope of the case, i think. Originally this was going to be a consumer-fraud case where the company had to prove its own innocence (presumed guilty?) and now this is a straight-forward illegal investment fraud?
Didn’t Hoss explained the cunning strategy of judge Khalil a few weeks back?
(Oh, and I’m working off auto-translate so my terms could have gotten mixed up a bit)
My Google Autotranslate kind of chokes on Portuguese. Maybe its the legal terminology that causes the problems but regardless sometimes its not very intelligible.