TelexFree openly promoted as an investment in Peru
With the granting of an injunction prohibiting TelexFree from paying out weekly ROIs and signing up new affiliate investors in its core market Brazil, it was inevitable that promotional focus would shift to neighbouring regions.
One such region TelexFree’s affiliates are making inroads into is that of Peru, a country of thirty million that sits on Brazil’s western border.
Of particular note is that Peru is bordered by the western Brazilian state of Acre, where TelexFree is under investigation by Public Prosecutors and facing possible criminal charges of money laundering and embezzlement.
It is also the state the injunction was granted against TelexFree, crippling business operations throughout the country.
At the time the Acre injunction was granted, TelexFree purportedly had around 70,000 affiliates in Acre and, post shutdown, it appears a lot of the marketing momentum pushing the scheme shifted over to neighbouring Peru.
As TelexFree has begun to spread across Peru, local media picked up on it prompting Peru21, a national newspaper, to conduct their own investigation into the promotional activities of local affiliates.
Here’s what they found.
Responding to an advertisement for a “tempting job offer”, Peru21 arrived at the office of a TelexFree affiliate in Lima, the capital of Peru. There they were met by Wilmer Garcia, who proceeded to pitch them the TelexFree MLM opportunity:
Garcia explained that there is a way to make money with TelexFree. For this you have to do digital advertising with the aim of providing a software which enables telephone calls through the Internet and low costs: the alleged scheme VOIP.
If a person decides to invest in the business, to pay U.S. $ 339 or U.S. $ 1.425. then can promote the product one or five times a day for a year. Everything is recorded in a contract and earnings are up to $ 100 weekly.
But you can earn much more if you get more followers. For each person, you will receive $ 20. If the latter captures to another, you also receive another $ 20 and so on.
The first bolded block of text above refers to the core of TelexFree’s MLM business model, the investment in AdCentral positions by affiliates. $339 buys you one position and $1425 buys you five (referred to as an “AdCentral Family”), with investing affiliates then paid $20 a week per position. Provided of course they spam the internet daily to promote the scheme.
Positions are often referred to as “contracts”, expiring after 52 weeks at which point an affiliate has the option to “renew” the contract and earn a weekly ROI for another 52 weeks.
Newly invested affiliate money is used to pay out existing affiliates each week, with the company pretending to sell VOIP services to non-existent retail customers.
The second bolded text refers to the recruitment commissions offered by TelexFree, paying out $20 per new affiliate investor recruited.
Garcia claims thus far to have been paid $8000 USD through TelexFree, claiming
the ‘pioneer’ of the business in Peru was Pastor Basilio Marcelino Salazar, who started the business six months ago.
Currently there are about 50 000 promoters in the country and every affiliate is responsible, in turn, to recruit other people.
Seeking a second source of confirmation of Garcia’s claims, Peru21 then visited the office of another Lima based affiliate, Felix Dominguez. In pitching TelexFree to Peru21, Dominguez provided them ‘the same explanation‘ as Garcia.
Peru21 advise that as it stands there are no “formal complaints” against TelexFree in Peru, however they did approach the Superintendency of Banking and Insurance for (SBS) comment.
When asked whether or not TelexFree was a Ponzi scheme, SBS replied
(In TelexFree) this is not such a case because it manufactures a product (the Internet communication system) and do not provide interest on the money.
Whether or not SBS have looked into TelexFree’s business model with any sense of depth is unclear.
Peru21 also reached out to the Peruvian Association of Consumers and Users (ASPEC), who advised
if the company does not comply with the provisions of the contract, ie, obtaining the alleged profits, the company is facing civil, administrative and even criminal charges.
We must see the contract. Every company has a business address in Peru but in the case of TelexFree, they do not and have offices only.
This point is important because, if a consumer wants to make a complaint, this is not possible because the company does not have a registered address. Nor does it have a RUC (Taxpayer Identification Record).
My take from that is that currently TelexFree’s claims of selling VOIP services to actual retail customers are being taken at face value, without Peruvian regulators having verified the claim themselves.
Meanwhile how TelexFree is being marketed by local Peruvian affiliates certainly suggests otherwise.
Footnote: Peru21 include an audio file of their conversation with Wilmer Garcia with their report. Unfortunately the audio is in Spanish and as I don’t speak Spanish I can’t verify what is said in it myself.
If any readers speak Spanish a brief summary by way of comment below outlining what is said in the conversation, would be much appreciated.
Horrible extra noise, and my Spanish is rusty, but Wilmer specifically referred to “Central de Annuncios”, or “AdCentral” in Spanish, then repeated the “how much it costs” and “how much you can make” stuff as specified.
He even shows what sort of ads he posted that day. $20 per week, for a whole year, one can earn, per “contract”. Can get a “family pack” of 5, get $100 per month. Then the guy answered a mobile phone call in the middle of the show-and-tell. Then the guy explained how the money arrives, withdraw commission every week, money comes in like 2 weeks. That’s about 10 minutes.
Then the guy explained the recruitment commission through “invites”, how they’re now a “family” and all that. Left leg and right leg… Multilevel… Wilmer had been in for about 5 months.
The undercover guy asked about VOIP and the guy basically brushed over it, blah blah about how many promoters (50000?) In multiple countries… Then something about lawyer, contract, it’s really formal, blah blah. No official office in Peru, everybody’s just promoters. Everybody can use a bit more easy money. Everybody in Wilmer’s family already joined.
Hate to say this, but South American countries, esp. Peru, has NO experience with Ponzi schemes except Colombia. WCM777 is hot in Peru because Ming Xu got a church guy pushing it. It’s “Church La Luz” (or “The Light”) and David something.
I still wonder about why didn’t SEC investigate TelexFree yet. My guess is because TelexFree is small in the US. But, anyway, would a fraud report at this SEC website work? http://www.sec.gov/complaint/select.shtml
As Google Trends show, considering the peak popularity in Dominican Republic as 100%, the search popularity for the term “TelexFree” in Peru is about the same as in Portugal, about 40%. In the same scale, current popularity in US is only 1%. 🙁
Seriously, I feel bad for TelexFree being so small in US. I would like it to grow a little more, only just enough to call the attention of the authorities. 🙁
Another great article… Thanks, Oz
Hello Oz and other gentlemens, As i understood TelexFree activity were stopped in Brazil, What can you say about Russia and Europe ?
I live in Russia and TelexFree got rapid growth lately. People invite people etc. What can you say? Can IT still work outside Brazil …in Russia?
Thanks for the translation Kasey.
I’m seeing pastors pop up everywhere at the center of these schemes. I’m surprised the respective churches don’t step in.
Follow the money, without that new affiliate money flowing in from South America (Dominican Republic, Portugal and Chile), the scheme would collapse.
TelexFree is an obvious Ponzi and Ponzi schemes don’t work anywhere.
My brother and his wife are involved big time in TelexFree. They went to the “Extravaganza” this past weekend in Orlando. Anyway, I’d hate to tell them “I told you so” and I probably won’t.
Last year they tried to recruit me under Zeek Rewards and I turned down the offer. Not so later after that the whole shutdown happened. They got involved into some company named “Organo Gold” or something along that line right after the Zeek Rewards fiasco. Around the same time they also got involved with Momentis, Wor(id), and TelexFree.
They, apparently, love to be involved in what they call the MLM world. I’m a bit skeptical about whatever company that requires for you to sign up ppl and ghost products. They on the other hand seem not to get enough of it.
They are paying for the sense of “proximity to greatness”, the group of “like-minded people”, and “dream to be big”. They just don’t quite realize they’re in a “money cult” that’s designed to specifically sell that those dreams to them.
I speak spanish and i can translated for you. Send me the file and i will try to transcript it.
File is available on the Peru24 report, it’s linked in the article above.
I`ve been reaped at the stock market and the casinos so many times and with Telexfree I`ve seen money coming into my accout as I have never seen with the nasty stock market nor at casinos, with Telexfree now I am reinvesting half of what I make and keep the other half for myself.
I never was able to do this with the legal stock market nor with the nasty casinos. Maybe the white collar thieves are jealous with Telexfree.
So because you suck at the stock market and gambling, that makes it ok to participate in a Ponzi scheme?
Whatever helps you sleep at night champ…
What ever you want to call it, thousands are sleeping soundly.
I use the telecommunication software and it works great, the money I am making is more than I ever did in a full time job and I am keeping my regular job only because I love it however I can afford better weekends and vacation time. More products about to be launched…
Don’t quit your day job.
I’m sure there are plenty of ILLEGAL enterprises that will return a sure profit far faster than TelexFree.
If profit is your primary motive, you’re not making the rational choices.
You’re simply addicted to RISK… You don’t know if TelexFree is legal or illegal, just like you don’t know if you’ll win in casino or stock market. But you know the EXACT odds in a casino. You don’t know in TelexFree or stock market.
So what *is* your rationale in participating in TelexFree? It’s clearly not just “money” as you keep mention casino and stocks, which are LEGAL. So you want legal and profitable… so why TelexFree?
Perhaps you want profitable, but only WISH it’s legal?
Going to a casino is a fantasy that is “purposely and calculatedly” created to give the visitor the “hope” that “they” can be the one that’s going to have that “big winner” story to tell. Buying scratch off tickets or lottery tickets hold the same “hope” that it could be me this time.
“Can’t win if you don’t play” is a powerful tag line to draw in even the most stubborn skeptics when the pot gets big enough. I know I’m not going to win but it’s always fun to dream. We know when we lay down our dollar that it’s most likely lost but we understand the odds in advance.
Simply put, the stock market is the same. It’s very complicated and people want to win like the big guys do but when they don’t and lose their life savings, scratch their heads and can’t believe how unfair it is. If you don’t know what your doing with your money or don’t listen to your investor ….well you can lose everything.
Wanna play with the big boys? Be prepared to lose like they do too. The difference is, they can usually sustain a hit, but even the big guys go down too.
That brings us to MLM ponzie pyramid schemes. They prey on the hope of people that think big money is going to solve all their problems. Telexfree does a great job of speaking to those that really don’t understand business to begin with and so can manipulate them easily.
I’ve listened to many of what they call “sales training” sessions. It’s not sales training at all…it’s open your mouth and let me pour down your throat some “awsome” koolaid. hmmm AWSOME….is their favorite pitch word to describe anything their talking about.
It’s hype…They don’t talk about a product but how they are “changing” peoples lives. They are going in to poor countries now and feeding off of the hopes and dreams of the poor.
So “Roy” you obvious moronic toy…..that you have no grey matter in your head at all…..you save a lot of money on Ibuprofin….a head ach med.
No such thing.
Its cynical exploitation of trusting people under the quise of offering them hope. Its disgusting and the people who engage in this trade would as willingly steal from children.
A former affiliate telling the truth about the pyramid Telexfree.
Want to give us non-Portuguese speakers a rough rundown of what he’s saying? (anyone?)
There’s also somthing to be said about these “American” business men dressing up in suits and going into these poor coutries and acting like they’re as legit and powerful as the CEO’s of Disney or Walmart. It’s shamful and puts such a bad face on American business which already needs a very large napkin to clean the mess off it’s face.
Anyone reading this blog that’s thinking of going into Telexfree really needs to understand that perhaps “you” make money but if I told you that I was going to make money by taking it away from your sister or brother or your retired parents life savings….You wouldn’t like it.
So, you don’t see the face your stealing from when you collect your check from your “back room”? And you just smile and collect the money? Next time you click “pay me my money”….think of someone you care about that…. “I’m stealing money from”!!!! Feel good now?
The telexfree gang are fake’s trying to look legit. NO company I’ve ever worked for has had CEO’s saying “hey guys” every two minutes and “awsome” is the answer to everything. It’s “trash” meets wanna be wall street but just can’t quite make it.
They’ll brag 2,000 attendees at the last extravaganza….? I’m sure it’s not to hard to find 4,000 people that are in hard shape and hope telexfree is the answer. (they just didn’t have the ball gown nec to attend).
There’s a lot of lazy people out there, a lot of needy and just those that are smart enough to be the blood sucking @#$%&* that they are and those will b the winners.
I don’t think the average person can get a grasp of the whole online fraud “industry” until they both realize and accept that there is a whole (growing) substrata of 2013 society which genuinely “DOESN’T” see what it does as unacceptable and / or immoral.
In fact, on the contrary.
To it, the elderly, disabled and naive make BETTER victims.
In my observation, these people operate with a completely different set of “rules” and it is not until the rest of society comes to grip with that fact will it come anywhere near being in a position to protect itself, much less individuals within it.
Not even illegal drugs like ecstasy, meth, crack, snow, shrooms, and such?
Not even. See dead drug dealers.
pl update latest news of brazil for tellex. i m from india and its going to take place in india.
One of my friend says tht it is working properly in brazil and all problems are shortouts.
Still under investigation for being a Ponzi scheme and facing criminal charges of money laundering and embezzlement.
Your friend is lying to you, which is a shame.
TelexFree is a Ponzi scheme should really be your only consideration. Looks like they’re really desperate for new investor money if they’re now targeting India.
The situation in Brazil haven’t had any significant effect on other markets yet, but when it first have it will happen immediately and you won’t get any warning signs. Warning signs have already been visible for a long time.
TelexFree’s global market is operated from the US. The first warning sign was the injunction in Brazil in June. Other warning signs have been all the changes they have made to protect the operation in the US, and all the temporarily payment trouble they have had (switching banks, switching payment processors, etc.).
There’s no more than 2 or 3 weeks since they had to change bank, from Bank of America to an unknown bank.
There’s 2 months since they had to change payment processor, from GPG Global Pay Gate to I-Payout. They had credit card issues around the same time.
All that are signs of upcoming problems that will be more and more difficult to resolve.
The situation in Brazil was an immediate threat to other markets between June 18th and August 30th, i.e. it could potentially lead to an immediate shutdown of the website or payment processes for all other markets. The Brazilian court COULD execute an order like that through a court in the US, based on the involvment in an ongoing crime.
All the Telex Free affiliates are saying the same thing. They have been told to play it cool and to further perpetrate the lie that nothing has happened. They don’t want the new recruits to sense something it’s going on.
They did the same when Zeek rewards. They will create this facade to make the rest believe everything is alright.
As the shills say, you can’t win if you don’t play. 😉
HYIP ponzi / pyramids simply cannot survive without “new” money and any adverse publicity which in any way slows or stops new money coming into the “program” means it will fail and fail sooner rather than later.
Every new-to-the-HYIP-scene recruit who Googles “TelexFree” and thinks better of joining after seeing reports of the Brazilian court action only increases the chances of a catastrophic collapse and subsequent loss of investors’ money, no matter how hard the usual suspect HYIP ponzi players may try to suppress the news.
Forget about the legality or otherwise, no HYIP ponzi in history can survive or has survived the sort of negative publicity that has plagued TelexFree over the past few months.
Would you give me specific info about TelexFree’s bank account transfer from Bank of America? I cannot find this piece of information.
I’m collecting data on TelexFree’s problems to warn my frienda that are enamored with company’s “promises”.
You are probably thinking of this PDF:
I heard that the telexfree won the case in Brazil and the judges drop all the charges..is it true??
Not as far as I know.
Costa arrived in Acre for the mediation conference between himself and the Public Prosecutors yesterday. TelexFree affiliates had been sending out the usual “get to the airport and show support” spam emails, so when he arrived there was a reception of investors.
For reasons unknown he apparently said “it’s won” to the press, although what he was talking about is unclear.
Meeting with the authorities today (Thursday) and then the mediation conference on Friday. PP’s have previously stated that nothing short of the company disbanding and paying out its investors will be negotiated so it’s doubtful anything productive will come of the next few days.
You don’t think the newspapers would be reporting on THAT if that were true?
This wasn’t the first time Brazilenos had been releasing bogus news. Didn’t we get some Brazilenos claiming that all charges had been dropped a few months back?
Don’t believe it until you actually see the court order, ON THE COURT’S OWN WEBSITE.
Globe just had an article up… Mediation between Costas and MinJus was unresolved.
I really wish there was some investigation for the US side of telexfree. Alot of my wife’s family is from the Dominican republic and all I hear everyday is about them wanting to join and for me to join in.
I already know that companies like this (MLM) are usually scams and bad news, but nothing I say gets through to them. Even the part of the Brazilian investigation doesn’t make them budge.
read all the comments…..is there any latest update……thanks
Peru banned WCM777 last week (along with TelexFree) – https://behindmlm.com/companies/telexfree/telexfree-and-wcm777-banned-in-peru/