TelexFree to release new compensation plan?
Providing yet more evidence that TelexFree’s AdCentral investment scheme is nothing more than a $20 a week ROI Ponzi scheme, the company appears to be gearing up to release a new compensation plan.
In anticipation of the official announcement, expected to made sometime later this week, TelexFree owner Carlos Wanzeler appeared in a YouTube video uploaded on February 17th:
The title of the video is “TelexFREE Novidades sobre o novo plano de compensação”, which Google translates to “Telexfree News about the new compensation plan”. As far as I can tell, the video doesn’t provide any specifics but is instead a few minutes of Wanzeler ranting about pseudo-compliance (“we don’t want the wrong information to get out there” etc).
Offering up unofficial specifics on the new compensation plan is Russian TelexFree affiliate investor Ivan Kernev. Posting on the site VK (Russia’s Facebook equivalent), Kernev writes
SOME CHANGES IN INTERNATIONAL Telexfree !
First , let me make clear that I learned from people who attended the meeting this afternoon in the U.S. ( So is unofficial ) .
The changes that will occur are for BEST! The Company Legally will be stronger and more balanced too.
The mention of “leaders meeting in the US” is of interest, as it was recently confirmed by Brazilian Public Prosecutors in Acre that a TelexFree US investigation was underway.
Kernev continues on, reassuring his fellow affiliate investors that they will still be able to receive their guaranteed $20 a week ROI, albeit with some new conditions:
Have to start killing the curiosity of all : YES , the gain will remain FIXED! But only for those who qualify in torque , ie , Make 2 Sales of wholesale VoIP franchises (Can Earn even more).
1 ° Every change will start from the day March 8, all contracts signed by March 07 will be completed by the end of the way it is today.
2 ° No more ads daily , Nobody will have to make announcements .
3 ° If you want to continue receiving $ 400 per month , only has until March 7 to buy the Family , because thereafter the Family Pack will no longer exist , other Plans that will be even better for those who actually develops MMN .
4 ° The whole IT team is working on new applications and Brief will be Issued.
I’ll be preparing a more detailed presentation so that all information is 100 % Confirmed by the Company.
Bearing in mind these are currently unofficial changes, the mandatory sale of two VOIP accounts doesn’t surprise me at all. It’s an open secret retail is non-existent within TelexFree and if I had to guess, I’d wager well over 90% of the revenue flowing in and being paid out weekly in returns was sourced from affiliates.
What will be interesting now is the dynamic shift within the company. Existing affiliates will have no problem redirecting a portion of their ROI to two additional VOIP accounts (using fake or family member customer details of course). For new affiliate investors, which the company needs to survive, the scheme now looks a lot less attractive.
Whether or not two VOIP accounts must be sold per AdCentral position or not is unclear, but if it’s one per position… then even for those with large downlines who have invested alot things don’t look too good.
$20 a week is $80 a month, VOIP at retail costing $49 only leaves an effective monthly ROI of $31. That’s $372 annually on a $289 investment. Add on the 20% mandatory re-investment TelexFree on every position after 12 months, and it gets even worse.
But again, at this stage we don’t know whether the VOIP sale requirements are account-wide or per AdCentral investment position.
As for the canning of the mandatory daily spam, can’t say I’m surprised. Both AdSurfDaily and Zeek Rewards pretended their affiliates were getting paid to spam the internet, both went down in Ponzi flames when the SEC investigated.
The ditching of the AdCentral Family investment pack seems neither here nor there, as I imagine those that still want to invest that much can just do so with individual AdCentral position investments.
Kernev states that the new compensation plan changes will come into effect in early March, with current AdCentral investment “contracts” payable till they expire (52 weeks from the time of investment). Supposedly Carlos Costa is going to announce the changes in a YouTube video later this week but this appears to be the gist of TelexFree’s changes.
Looking at the bigger regulatory picture, one has to wonder whether it’s too little too late. Oh and no word on whether or not this has anything to do with i-Payout’s recent crackdown on MLM compliance.
i-Payout handle TelexFree funds and have argued previously that their AdCentral investment scheme is “compliant with all US laws“.
Pending an official announcement from TelexFree, stay tuned…
Changes like that will be too dramatic to work. They will probably accept 2 customers per month for a net cost of $10, like they already do.
Full price $49.90
– commission $44.90 (1st month commission)
= net price $5 (1st month) for 1 “customer”
According to Gerald Nehra, the customers can be people in your downline, and they can also be yourself (through a sub account).
They already have a criterion about minimum 1 active customer per affiliate (or per account with sub accounts) if they want to qualify for binary commissions. “1 active customer” will generally cost the net price of $5, rather than the full price.
If they keep “customers can be your downline”, that’s an effective affiliate-investor recruitment requirement is it not?
And if you can do it yourself within the plan, that’s even worse than creating fake customers or paying some service for fake email address customers…
You CAN technically sell retail to people in your downline, if the product itself is retailable and don’t have other functions, e.g. as qualifier for commissions (for the person buying the product).
The VOIP subscription will pay up to $44.90 commission the first month, but after the first month people may either disable that service or it may generate $1 commission 5 levels deep in a matrix, the same commission for both customers and affiliates.
So there’s no legal difference between customers and affiliates for that service. People can be assumed to be buying 1 VOIP subscription for personal use as “end users”. That logic can only be applied to the VOIP subscription, not to the AdCentrals.
All this talk from Telexfree about how to “create” a legitimate customer? Really? Why all the finagling if it’s a legitimate MLM? Why not try, saaaaay…..actually selling somthing? The fact that this kind of chatter goes on is laughable and an insult to any thinking person.
It’s a given that Telexfree members are people who want fast cash without effort. Right now all Telexfree is requiring people to do (other than open their wallets) is to place a few adds a day and that’s become such a burden that some of them are actually farming the work out ….lol.
Some of the things that are shared here can be laugh out loud outrageously ridiculous and ignorant…..And then I think of the enormity of it and it’s truly frightening.
LOL. I’ve heard of people who post ads for others in this scam. Just ridiculous. If posting a few ads can become such a burden to some members, can you imagine them trying to sell real VOIP – real work?
Telexfree will come crashing down before the US even gets a chance to shut them down once this new compensation plan kicks in.
Reason: easy money – gone.
@Diane…
Ya got that right sista….lol. But OOOOOH no, I want Telexfree to stay alive and well until the US gov has the time to build the case that it needs to take them down with all the humiliation that the owners, marketers and top earners have earned.
With the damage that these people have done and will continue to do? …I want them to have the greatest of humiliation…. wearing orange for a long long time….
You and I both know an “orange” jump suit is a fashion ew … 🙂
Most of the marketing have been aimed towards attracting passive investors. “Everyone will make money, you don’t need to recruit anyone or sell anything. You’ll get paid to advertise. Period”.
It isn’t legitimate MLM, but it does have SOME legitimate distribution of a product or a service via an MLM structure.
Gerald Nehra operated with the rule “minimum 20% external customers”, for him to be able to defend internal consumption of the VOIP service. But he also said “we’re not there yet”.
Nehra has completely ignored the investments in AdCentrals, but he’s right about that he most likely will be able to defend internal consumption if TelexFree has a reasonable amount of sales to real customers. He may potentially be able to defend that part against pyramid scheme allegations.
A part of his idea is actually correct. TelexFree does actually have a component that is legal in itself. You can compare it to BurnLounge where only the illegal parts were halted, while a part of the business was allowed to continue until it collapsed by itself.
The major flaw in Gerald Nehra’s ideas is that he ignores the reality, e.g. I’m pretty sure he has miscalculated the number of external customers, and the amount of revenue generated by them.
When the PRIMARY part of a business is a Ponzi scheme trying to attract passive investors, retail sale will usually be extremely low. Zeek Rewards had 98% of the money coming in from investments in sample bids, while 1-2% came from sale of retail bids / membership fees.
TelexFree will most likely have some similar numbers, e.g. 95% of the money coming in from investments in AdCentrals, 4.5% from internal consumption of the VOIP service, 0.5% external sale of VOIP service. It may even be worse than that.
I thank you for I have learn a lot from all the comments and post but i don’t like you talk negative just because it is easy money. I am a mother and wish to stay home with my kids but the system wont let me… Recommend me a company that can give me good profit from home?
I been learning about the company. Is true they are not a 9-5pm bore hatting your job company and have their flows but it has people making some cash and they pay right away. The idea of sharing money like this is great for low income families. Don’t you think if this company can work like this without government interference would be a positive thing to everyone including the market of the country that loves to spend and its economy depends on it?.
You want to see companies like AVON exploiting their affiliates for dimes while they make billions and this is a legit business for you.. to me that is the REAL SCAM! Or even Google, do you know who much they made and give their affiliate a misery compare to their gain. Lets reason…
There are some crooks but this company is not hiding as we can see at least we know their faces and they are active.
You know the millions paid by broadcasting in 1 minute ads at the Super Ball, it can feed a country in hunger. is that fair?. There is crazy money in this industry and no wonder gov authorities with their monopoly wants to shot them down, no money no freedom. Facebook only makes money with people, now that it legit. Exploitation like this is what some people like, all for one none for the people.
I heard of a mother that is making $20 dollars/week and in her country this is a lot of money for her. She is now able to send her kids to school every day which required a bus fee and she seemed grateful. This make Google affiliate look evil 🙂
Give your report with love and advise positively. I truly like how @M_Norway comments, somewhat educational and one understand the risk. But guys, isn’t live about risking to gain. we all risk that dollar to play the lottery at one point, don’t we? 😉
I wish the company well and the people there, is a good money making machine after all 🙂 Money is paper don’t be attached to material things…
Blesses to all..
lets all join, We can make a good team 😛
Whatever your sob story is – it’s still not justification for a Ponzi scheme.
Your due diligence is up to you. Stop being lazy.
There’s nothing great about stealing from low-income families who invest after you. Sooner or later said families aren’t going to get paid… then they’re fucked and that’s on you.
But fuck ’em right, you got your money. Way to set an example for your kids.
Whinging about other companies does not change the fact that TelexFree is an unsustainable Ponzi scheme. Leave the offtopic derail arguments on Facebook, thanks.
If wishes are horses, world would be full of manure.
Or in a somewhat more polite version…
“Life is not fair.” — John F. Kennedy
Life being not fair doesn’t give you a license to turn a blind eye to the company’s impossible payout or to participate on what’s already judged an extremely suspicious alleged ponzi scheme.
And you don’t ask where the money’s coming from, do you? Probably from other mothers like you, with the same dreams. Except, since you got there first, you’re taking their money, while they will take money from some other people.
Did you bother READING this website? We don’t consider Avon Or Amway or Herbalife to be “legitimate”. They are scams in many ways, but they are FAR LESS OBVIOUS scams than TelexFree. And Avon’s been losing people in the US every year since 2009. People vote with their feet.
The lottery’s odds are fixed and you *know* how the game’s played, as its regulated by the government. With TelexFree you know only what they TELL you, and it’s often lies and “neglect to mention”. It’d be like playing poker where you know the opponent is cheating but you don’t know how many cards he’ll cheat with. Why play such games, EVEN IF IT’S FOR YOUR KIDS?
And how much did you put in any way? Are you sure you’re really trying to convince us, and not yourself?
Hello, MissLove.
On comment #9 you said:
I can only comment on my personal view of the situation, but I believe others at BehindMLM would agree to the following:
1) BehindMLM blog entries are not opinionated; The blog’s slogan is “Unbiased MLM news, blog commentary and reviews”. No one is “talking negative” of TelexFree – facts are being exposed and commented on from a critical analysis perspective, “outside of the TelexFree box”.
2) No one here is “talking negative” because it is easy money; The illegal, recruitment-driven compensation plan the company has been promoting and operating on so far is the point of the argument. I would love to get paid to do nothing all day as long as the money didn’t come from people fooled into investing their life savings in the company so that it pays me.
thanks for this timely infor about telexfree.me and my wife are about taking a loan of $1400 to join. but its like, it is still growing despite the problems in brazil and USA
I believe Costa had one last lifeline to God and God just revoked it after laughing out loud at the latest shenanigans these TelexFool clowns just came up with.
Some of you need to read the ASD hearing transcripts. Nehra is an opinion for hire and believes what he is told. He never investigated ASD, he just believed what Andy Bowdoin told him. And guess whee Bowdoin is today? Federal prison……
@ Giddy
After reading all this and you would actually take out a loan to invest in Telexfree? I hope I misunderstood.
This is when I want to stick a fork in my eye….UGH!!!
1) There is no such thing reliable easy money.
2) If you do not have skills or connections, start developing them. Otherwise, nobody will offer you good job.
@MissLove
I understand that Telexfree members will hire people to place their daily adds for them. (I’m assuming this is so it frees them up to sell the voip product)
Perhaps you should look into it. That sounds like a perfect opportunity for a stay at home Mom. Think of the possibilities considering the brazilllions of people who have joined Telexfree. : )
Unconfirmed: I’m seeing things like a $19.95 monthly fee, an increase in AdCentral position to $149 or so and reduction in the weekly ROI.
Some sources are reporting the ad spamming is gone, some say it’ll remain.
Nothing officially confirmed by TelexFree yet though so treat all of the above as unconfirmed speculation from affiliates.
Latest Costa video is out. From what I can gather from auto-translate, they’re introducing the new compensation plan because of the legal action in Acre (again confirming they were a Ponzi scheme), and that a video will be out “next week” detailing the plan.
Some meetings have been held in Brazil so that’s where the leaked information has come from (I’m still treating any information as unconfirmed till official comp plan documents are out).
I have to point out that changing your comp plan doesn’t negate the period of time you ran a Ponzi scheme. Acre’s PPs aren’t going after TelexFree for what they haven’t done yet, they’re being held accountable for running the scheme these past few years.
Somebody might want to tell Costa and his legal team that…
It´s been over almost 2 years since you are giving information about Telexfree and my question is: if it´s so easy to detect that´s ponzi, why is still operating? Ther´s nobody to shut them down?
I´m from Spain and I know a lot of people that are making money with Telexfree. If it´s illegal why is still operating?
It isn’t operating in Brazil. It has been stopped. I would guess that some people made money and even more people have lost it.
Spain has to handle this in its own way because nobody, including the UN is going to be sending police and an army of attorneys into Madrid. Its a Spanish matter….your money and your country.
The problem with Ponzi schemes is we are as certain as we can from OUTSIDE the company, but the only *real proof* that law enforcement needs are INSIDE the company.
Slight aside, there’s Brazilian news when the Prosecutor’s Office apparently blew their budget trying to prosecute TelexFree, and the judge ruled that they have to pay the costs (mostly expert consulting fees) rather than sic it on someone else.
Oz:
Know anything about this? I just saw it posted by someone on Facebook…I started laughing at the sign of the headline-Another Great Victory-I wasn’t aware they had any victories to this point, unless you consider losing about 14 appeals to be victories! LOL..
Anyway-here it is:
What do you know? What are your thoughts?
This aspect of the case was ruled upon months ago.
What seems to have happened here is that the prior ruling was published and the media either revisited the issue or Telexfree wanted to used the ocassion to highlight the prior ruling and tap all the public relations value they could out of the ocassion.
My guess is that the government must pay certain litigation costs up front (it specifically mentions expert witnesses) but there is nothing here that implies the government will end up carrying all the costs when this is over. Should Telexfree be found guilty/or liable the cost of prosecution could quite readily be shifted back to Telexfree via fines or special assessments.
However if Telex prevails the government would have to bear these costs of an unsuccesful and unwarranted prosecution.
Is that good news? If you believe Telexfree is legitimate then I guess it is.
@Oz-nevermind! Just found the info and have the answer!
When the case first ended up in court, the original judge ruled that TelexFree had to prove their innocence by demonstrating why they weren’t an illegal pyramid scheme. This interpretation, called “reverse onus of proof,” is commonly applied in Brazil in cases involving consumers.
TelexFree challenged this ruling, which is very strange! You would think that if they were a legitimate opportunity, they’d jump at the chance to prove they weren’t an illegal pyramid scheme, to prove their innocence, but no! They wanted the burden to be on the prosecution and make them prove to the Court that they were on a illegal pyramid scheme.
In early October 2013, Judge Thais reversed the original decision where TelexFree was going to have to prove they weren’t an illegal pyramid scheme, instead making it the responsibility of the prosecutors to prove that TelexFree is an illegal pyramid scheme, as is common in other types of cases. (In other words, exactly the same standard that is used in cases in Brazil where consumers are not involved, and the same standard that applies in U.S. courts where the prosecutor has the burden of proof!)
Apparently, the Ministry of Public challenged the ruling, wanting to shift the burden back on the defendants, TelexFree, to prove their innocence, but the judge determined that the prosecutors had the burden of proof. Judge Ferrari’s ruling simply reaffirmed Judge Theis’s ruling, meaning that the burden of proof is on the shoulders of the prosecution, and they think this is some big victory? Are they frickin’ NUTS?
Evidently it hasn’t dawned on those Perry Mason wannabees that the prosecution has already been able to establish enough burden of proof to get the company shut down since June of 2013, to get their assets frozen, and to get prohibited from recruiting new people and paying commissions! Jesus, you’re so clueless you should be in a coma!
In addition, the 14 times that TelexFree has gone to court to have the original injunction lifted, the prosecution has won EVERY single time! TelexFree has lost 14 different times to get the original injunction lifted, not to mention TelexFree having lost their 2 recent bankruptcy pleadings! The prosecutors have won all 16 legal cases of significance! Listing them all wouldn’t matter-facts to TelexFree reps are what garlic and a cross are to a vampire! LMAO!
Only on Fantasy Island, a ride at DisneyLand, or in the Twilight Zone would anyone consider this ruling putting the burden of proof on the prosecutors to be any type of big “victory.”
The TelexFree lawyer is just trying to put a positive spin on an otherwise disastrous situation. Hey, I’d do the same thing if I had my ass kicked 16 times in court so far! He’s all excited because the expenses for the trial have to be paid by the government, saving TelexFree millions of dollars in legal fees? In most countries the initial costs for a trial are borne by the government! Nothing earth shattering there!
First, if the TelexFree lawyers are getting the rumored $3-$4 million dollars in legal fees, then in the opinion of many they’re ripping the company off and the company is stupid to pay them that much! LMAO!
Second, has it dawned on this legal genius of a lawyer that upon a guilty verdict, the judge will hit TelexFree with a big fine that will probably cover the costs of the case and then some! Wow, no wonder TelexFree has lost 16 times in court so far!
Whatever “victory” he thinks they’ve just won is no victory at all, and he knows it! If the original burden for them to prove their innocence had been maintained, they would have presented their case, the prosecution would have come back and refuted it with their case. Now it’s simply been reversed-the prosecution will have the burden and present their case, and TelexFree will attempt to refute it and show why they’re not a pyramid scheme. Regardless of whichever way the ruling went, both sides would have to present their case. So, where’s the victory?
The TelexFree lawyer is simply putting his spin on things in order keep TelexFree reps excited, give them some hope, and keep them in the company-what’s he going to say: Well, this ruling is no big deal because either way both sides would have presented their case and attempted to refute the other side’s arguments, but I’ve got to try to put a positive spin on something in order to give the reps hope because we’ve lost 14 attempts to get the original injunction lifted and we’ve had our bankruptcy filing rejected twice? LOL!
Arguing with TelexFree reps reminds me of playing chess with a pigeon. Regardless of how good I am at chess, the pigeon will knock over all the pieces, shit all over the board, and then parade around victorious without a frickin’ clue! LOL!
I swear…if brains were dynamite, they wouldn’t have enough to blow their nose! If their heads exploded, it wouldn’t even mess up their hair! LOL…Only a complete, “kool aid” drinking fool with no law degree or legal experience would consider this decision a victory of any significance!
Why all the TelexFREE hate?
Did you hear the latest. TelexFREE got a court victory. If PP wants to proceed he will carry burden AND pay cost? I bet she’ll bargain in conciliation now.
@Ken
My thoughts are two-fold. First I’ve never heard of a Ponzi scheme going unprosecuted because a government didn’t want to spend money.
Secondly how sad is it that TelexFree have to trumpet “success”, not on their business model, but on a continued campaign to try and weasel out of judicial scrutiny.
I imagine the government will willingly fit the bill to prosecute them. Due to TelexFree’s business model it’s a slam-dunk case. Once they’ve won, fine Wanzeler, Costa and Merril for all they’ve got and pay for what needs to be paid. Go through the US if need be as TelexFree International’s assets are ripe for the picking (at which point you’d expect the US to bring the hammer down too, which would then kill off Costa’s YouTube career and the rest of the nonsense they get away with in Brazil).
And the alternative? What… let them rope in more investors and create an even bigger catastrophe? Who’s going to clean up that mess?
Pending an announcement from the PP Office, I think this is a non-issue. Costa’s clutching at whatever straws he can.
The latest waste of time attempt to ruse the Brazilian court is this compensation plan change. Costa’s got it into his head that changing the plan (irrespective of whether the new plan is modeled on a Ponzi or not), will somehow negate the past few years of Ponzi operations.
Zeek Rewards thought the same thing too. So has every other “oh but now we’re going to focus on retail” scheme too. Didn’t work for any of them. You can’t build a business on a foundation of Ponzi and then switch gears.
You still go down in regulatory flames or your top investor promoters bail and you collapse.
@Shy
Yeah, because it’s coming out of Alessandra’s own hip pocket. Honestly…
Its long been observed that “cases are made during cross examination. Telexfree does not have to present any case at all, they only have to to knock down what the prosecutor alleges to win. The previous 16 adverse rulings won’t make any difference if they can do that.
Assuming TF doesn’t have a case, its wise to keep their mouth’s shut and make the Prosecutor prove up. Its a classic defensive posture and it has certainly worked before.
One meaningless victory after 20 or so defeats is not going to make one lick of difference. This is just about who’s going to PAY for the investigation. Investigation is still ongoing.
Here’s the article that relates back to this “big victory” that TelexFree reps are claiming they won…which I discussed in my previous post…
http://economia.ig.com.br/2013-10-25/caso-telexfree-justica-mantem-obrigacao-de-mp-provar-acusacoes.html
Its about much more than that. The government will eventually recover the money from Telexfree anyway.
Yes, the prosecution has to pay (for now) but that is because the burden of proof has been shifted onto the prosecution, and while that might seem like good news for Telexfree it is really not, because one, the prosecution has a strong case and two, the shift is due to a finding that the Telexfree/promoter relationship was predominately NON-CONSUMER. Under Brasilian law Telexfree would have retained the burden of proof if the judge found that this is a consumer action.
Now we know how the judiciary views this case and if the promoters were not consumers what were they? Investors maybe?
All and all a significant decision by a savvy appeals judge who by slightly raising the bar for the prosecution has closed numerous avenues of potential appeal by Telexfree.
Are false information posted by the group of Telexfree sites to trick people. Sites like “acrealerta.com” and “encontreinarede.com” fill the internet with enganossas news. See this information on a site of Telexfree group that advisers are celebrating.
São informações falsas postadas por sites do grupo da Telexfree, para enganar as pessoas. Sites como “acrealerta.com” e “encontreinarede.com” enchem a internet com noticias enganossas. Veja essa informação em um site do grupo da Telexfree, que divulgadores estão comemorando.
acrealerta.com/index.php/capa/menu/noticias-da-hora/telexfree-urgente-juíza-determina-que-mp-pague-os-custos-da-perícia-valor-pode-chegar-a-r$-2-milhões
The process “EREsp 981.949/RS” said the site was in another Brazilian state, Rio Grande do Sul, because the final letters “RS”. It was a process that happened in 2009 where the MP has accused a company that worked with slot machines.
O processo “EREsp 981.949/RS” citado no site aconteceu em outro estado brasileiro, o Rio Grande do Sul, devido as letras finais “RS”. Foi um processo que aconteceu em 2009 onde o MP acusou uma empresa que atuava com caça niqueis.
Despite the Acre MP, advance amounts for the audit, the amounts should be paid by Telexfree. More information in the justice of Acre site.
Apesar do MP do Acre, antecipar valores para a auditoria, os valores devem ser pagos pela Telexfree. Mais informações no site da justiça do Acre.
http://diario.tjac.jus.br/display.php?Diario=3110&Secao=226
The request for Reversed Burden of Proof was probably related to the expert evidence = the financial auditing by a third party expert. The party requesting a specific procedure should normally pay for the costs.
Hmmm… interesting view. let’s hope that’s indeed PP’s plan to close off TF once and for all.
The news report indicates that judge Thais Kahlil Borgia ruled that their were enough non-consumer elements involved in the case that it should be the Prosecutor who had to make the case. It was the prosecution who filed the appeal. Thais Kahlil’s ruling was upheld.
Nobody requested a reversal of burden. Reversal of burden means that under Brazilian law the defendant in a consumer case has to prove innocence. Thais ruled this was not primarily a consumer case. That is why the prosecutor has to prove guilt instead of the other way around.
Reversal of burden occurs when a defendant in a consumer case must prove innocence. The more typical and normal (unreversed) burden is where the prosecutor must prove the defendant’s guilt.
Hoss,
You are the most correct of this group of comments; except about what you said about consumers v. investors.
The person who must carry the burden of proof is extremely important. It is not easy to carry a burden of proof; especially where much of the information you need is in the other party’s possession and you need legal justification to get it. And the accused is under absolutely NO obligation to put forward a case. You made the allegation, you must support it.
It is only AFTER your carry your burden that an accused should ever consider putting forward a case. He should simply destroy yours as you go and stop you from carrying the burden. I am surprised to hear you all earnestly press for the accused carrying the burden of proving his innocence. I guess the American in me finds that disheartening. NO accused should ever bear that burden against the state.
Now, about the point of who is a consumer. Investors that are not “institutional” investors would certainly fall into the class of consumers. However, merchant and businessmen are generally excluded from this class. The findings that the case involves merchants and businessmen is extremely important to what substantive law will apply to the case. Consumers (including investors) have a great deal of protection that merchants and businessmen do not.
Finally, the 16 prior cases were mostly lost due to procedural rather than substantive issues of law. The bankruptcy filings were dismissed because the company did not meet the stated qualifications under the statute, i.e., doing business for 2 years as defined by the court’s precedents.
I must say I do find the entire legal proceedings in Brazil fascinating. In the USA you could never get a TRO and keep it this long while you admit you do not have the proof to prove your case. In the USA you have to claim that the proof you have will more likely than not win the case!
Also, in the USA you could never have a TRO last this long without more. I am amazed the company is not bankrupt, The proceeding itself would bankrupt most companies.
I am sure I probably should not say this here but there is definitely a new compensation plan. There was a meeting in the United States at the company’s headquarters but they have been talking about it for some time.
Additionally, the company is releasing 2 communications related products/services for sale. Both undoubtedly give substantial value to the company. Remember, the Ponzi/Pyramid analysis by an expert will have to determine the overall financial stability and sustainability of the company.
Isn’t the question, will the company fail if everyone stopped buying into the opportunity??
What on Earth are you talking about? The Prosecution have submitted thousands of pages of evidence to Judge Thais for review. That’s where the case is currently at.
Then there’s TF’s business model, that’s evidence enough of a Ponzi when broken down. Oh and the umpteen appeal rejections, all based on evidenced provided by Public Prosecutors.
But yeah… “no evidence”. Right.
TelexFree dupe investors worldwide. Till the US shuts them (or their payment processor down) they can continue to receive funds from investors and keep the company afloat.
Neither of which address the AdCentral Ponzi scheme.
whether or not TelexFree is a Ponzi. That’s easily provable by the fact you invest $289 and collect a guaranteed $20 ROI paid out of new investor money. Discussing sustainability within the context of Ponzi schemes is pointless.
The Public Prosecutor did?
The PP probably have identified the case to be a typical Consumer Protection case, e.g. a case about refunds to consumers. And the court have probably pointed out some additional aspects of the case.
“Financial pyramid” may involve other laws than consumer protection laws, e.g. gambling or crime. The case can’t clearly be identified to be a consumer protection case.
Another aspect of the case is the potential “Crime against public economy”.
As far as I remember, using a third part auditing firm to analyse the company’s records was requested by the court itself. The PP then requested reversed burden of proof = the defendants will need to prove their case and pay for the expert witness. The court then rejected that.
A potential shutdown in the U.S. will not be about whether or not the company potentially can be able to pay the investors in the future, but about whether it can pay the investors NOW if no investors are putting more money in.
It will be about the existence of “contracts” that primarily are about investments, and about where the ROI or PROFIT in those contracts have derived from.
You seem to have a good grip on the issues, but I have to disagree on this point because my understanding is that the injunction was granted because there was sufficient cause (substantive) to do so. That is not to say the that Telexfree did not appeal the injunction on procecedural grounds (you could hardly expect them not to) but as you know they lost every time on those concocted objections.
shy danielle: Also, in the USA you could never have a TRO last this long without more.
Its been my experience that a TRO is a short term temporary order. However an injunction is of indefinite duration. Telexfree is under an injunction.
As I understand the terrible Portuguese translations available, one of the things taken into account before the State was charged with paying for the expert witnesses was that Telexfree said they could not prove their innocence because they had no funds to pay for witnesses.
I’ll take your word for most of this but it does not seem the court agrees with you that consumers include investors. The court differentiated between the two and this case seems to be proceeding under the assumption that this is a non-consumer action. That Telexfree blurred the lines and lumped investors together with consumers is exactly why the injunction was issued and why Telexfree is being prosecuted to begin with.
You are entitled to your point of view, but the judge is cutting your legs out from under you. She has ruled that this is a non consumer action. So if the court does not regard you as a consumer, then what are you?
The prosecutor appealed Thais Kahlil’s ruling that the case was non-consumer and thus the burden of proof lay with the Prosecution.
You may be right but I was under the impression that the burden of proof reversed statutorily because the action was brought on behalf of consumers rather than because of a prosecutor’s request. Why would the prosecutor appeal a ruling that granted their request?
Correct. Judge Thais ruled that Telexfree did not have to prove their innocence, therefore there is no reversal of burden. The burden of proof remains with the Prosecution.
Strike the last sentence. I’m confusing myself. The prosecutors appealed because the judge disapproved their request.
I have simply recalled some details from memory. “On behalf of consumers” was an additional aspect of the case, not the primary aspect.
FACTS
TelexFree was shut down by a Precautionary Order in June 2013, a temporary restraining order based on that it potentially was running a financial pyramid scheme. The consumer protection aspect was brought in later, as an “extension of the case” rather than as the primary part.
I have simply identified the facts differently, e.g. I haven’t identified the action to have been brought “on behalf of consumers”. It was initially brought on behalf of MP-AC.
LEGAL LOGIC
In legal logic, you should first identify the facts correctly before you can identify legal sources (laws, other legal sources). Working in the opposite direction, e.g. trying to make the facts fit in with a specific law before you have identified them, will most likely produce flawed results.
TelexFree might be a consumer protection case, but it can’t be clearly established before the facts have been identified. It would be incorrect to apply Consumer Protection rules, the case hasn’t been identified to be that type of case yet.
The court will simply need to look at the facts in the case. It can’t ASSUME the case will be about consumer protection as a primary aspect.
Using a similar logic, you can’t ASSUME that TelexFree won’t need to prove anything. It will normally need to prove its own defense arguments, e.g. prove the validity of those arguments and prove the facts.
@Hoss
Here’s on translated source for “Legal Method”, how to apply the different factors in legal logic.
1. Identify the facts
2. Identify relevant legal sources (keyword = relevance)
2a. sort the legal sources, using a “weight system”
2b. Interpret the legal sources
3. Apply the legal sources to the facts.
The legal source with the highest “weight” will be the Constitution and how it has been interpreted by a Supreme Court, but most cases won’t involve any “legal issues” like that.
* Facts comes before legal sources,
* relevance comes before weight,
* weight comes before interpretation,
* interpretation comes before the legal source can be correctly applied to the facts.
Additional principles to use:
* Lex Superior (Legal source with a higher rank)
* Lex specialis (specific rule before general rule)
* Lex posterior (new rule before old rule)
Oz,
In the very odd translation I read the prosecutor argued, when asking that the court to require TelexFREE to carry the burden of proof, that it could not because the defendant possessed the evidence it needed to prove its case.
The standards of proof for a prelimimary injunction and the procedures are very different than a full trial in every country.
The relevant facts to the matter(s) at issue and the issues (legal questions presented) must be determined first; then the law is applied in order of precedent importance.
Legal Logic is usually taught as
I -issue
R – rule
A- analysis (or application)
C- conclusion (i.e., holding or findings)
@Shy Be that as it may, the Judge has requested information from TelexFree (affiliate database, amongst other things), which will no doubt be accessible by the Prosecutor’s. In addition to that they’ve also been in contact with US regulators, with any information exchanged having not been made public.
It’s kind of silly to suggest regulators not having access to information will mean cases against Ponzi schemes will get dropped. That’s what discovery is for.
All the Prosecutors have to do is show flow of money from new affiliates to existing affiliates. Hold up database (which the court has already ordered TelexFree to hand over), show complete lack of retail activity – case closed.
That’s what would happen in the US, but by all means feel free to believe things will pan out differently in Brazil.
That legal logic is probably flawed. TelexFree Brazil has been ordered by the court to deliver its financial records and member lists, but has failed to produce it so far.
A company clearly has the obligation to keep its financial records available for inspection by authorities. The “NO obligation” will only apply to criminal cases, where you can be protected by “self incrimination rules”. But self incrimination rules won’t normally be applicable in civil cases.
The TRO Temporary Restraining Order was replaced by a permanent injunction once the charge sheet was filed, 6 weeks after the TRO. “Permanent” = “until decided by a court”.
The TRO was an “emergency action”, based on the evidence available = enough evidence to justify that type of legal action. It has also been verified by higher courts during a total of 14 or 16 appeals = they have denied all appeals.
The TelexFree case is in the middle of the process where a final decision has to be made by the court. The case is currently in the stage of producing evidence. That’s relatively similar to pre-trial stages in the U.S. for civil cases.
If you compare it to the shutdown of Zeek Rewards, you will both find some similarities and some differences. Zeek was “voluntarily” shut down by the owner himself, and that will explain most of the differences.
Zeek’s shutdown only brought enough evidence to halt the operations and to appoint a temporary Receiver. The case has been going on in the court since August 17th 2012. The Brazilian case will probably last much longer than the Zeek Rewards case.
If you compare it to SpeakAsia in India, that Ponzi scheme was halted in May 2011 before it even had been investigated. They have spent 2.5 years investigating it after it was halted before a charge sheet finally was filed in December 2013.
That’s probably because he used a method similar to your own = apply legal ideas before the facts.
I used the opposite idea = try to identify the facts clearly, but not in each and every detail. So I didn’t try to interpret any legal sources or apply any legal ideas (other than vaguely identifying them).
I identified it in a similar way, only using different words and a few more details.
So what was it selling before? Hmmm?
Discovery does not allow for fishing expeditions,
Regulatory authorities inspection is prescribed before not after the fact,
Electronic discovery has broadened the amount of information buy the cist of retreival is prohibitively expensive and is an upfront costs for a plaintiff,
Oz,
They have been selling what I think you previously described as their “overpriced” VoIP product. A technologically advanced version of the discount phone card their predecessor, Common Cents Communications, sold. Additionally, in Brazil, they sold a bundled tv,internet, phone package and a shopping site. It looks like the company also had plans to operate some Best Western hotels although I don’t know how the hotel business would tie into the MLM.
Chang, not Oz,
Sorry, reply to you
“What have they been selling before”
Your memory is faulty.
One does not file suit on behalf of a prosecutor or the prosecutor’s office (MP-AC) If you have “simply identified” this to be factually true then you are once again “simply wrong.”
A prosecutor files on behalf, and in the name of the State, or the People of the state, not on behalf of itself.
In this case a watchdog agency (the Department of Consumer Affairs) had reason to believe that consumers and the economy of the state were being harmed by Telexfree. The Department collected information and evidence, wrote up a lengthy indictment and and brought its information and findings to the Prosecutor’s office in Acre. The MP-AC then brought suit on behalf, in the name of the People the consumers) of the State of Acre
Although the case began with the Department of Consumer Affairs, the judiciary has indicated by its rulings that it views the case primarily as NON-Consumer.
Shy Daniel seems to think this bodes well for Telexfree. I disagree, because to me non-consumer translates to “lack of retail” and if there is one uniform and endlessly repeated mantra on this blog it is that lack of retail = recruitment driven pyramidal ponzi scheme. Daniel?? Comments
@Shy
Yeah… and?
It’s a Ponzi scheme. There’s a very specific set of data that is required to legally prove that. This is commonly seen in SEC filings as the part where 99.9999999999%+ of revenue is sourced from affiliates. The rest of the data is known via the compensation plan (using said money to pay ROIs to affiliates who invest).
…no they haven’t. You and I both know there’s no retail customers. Let’s not enter the world of fiction.
Given how TelexFree is marketed and just the whole AdCentral investment scheme stink in general, it’d be beyond unlikely that there’s anything less than 99% of affiliate investment revenue flowing into the company.
You could probably count the number of retail customers TelexFree has on a fingerless hand.
All that garbage was just so people like you can run around the internet name-dropping. Same deal with Bontafo or whatever that football club is called.
Ponzi schemes commonly associate themselves with reputable third-parties in the hope some of that legitimacy will rub off. It’s nothing more than smoke and mirrors.
Right, but it does permit mining. The burden of proof is a bitch, and there are hundreds of ways to slow down and impede discovery so if discovery is needed t does not appear like this will be soon resolved.
It also looks like Telexfree is hoping and preparing for a negotiated settlement. The prosecutor says he has the evidence he needs to close out the case. If so, further discovery may not even be necessary.
The judge already has 40,000 pages of evidence or documentation in her possession. Based on that and the original allegations filed by the Department of Consumer Affairs I am going to guess there is sufficient evidence to shut Telexfree down permanently on the civil side of things with little or no further discovery.
On the criminal side of things that may not be the case. For now that’s a closed book.
I compared it to the shutdown of Zeek Rewards, but pointed out a major difference.
Zeek Rewards was shut down in an emergency shutdown in August 2012, long before any investigation had been finished. It was “voluntarily” shut down by Paul Burks himself in a consent order (a settlement).
It clearly had some regulatory inspections AFTER the first facts had been established. The case is probably still under investigation.
Look at the FACTS about those cases, and then try to establish the legal rules that have been applied?
You immediately applied your own legal understanding = “the law doesn’t work that way”. But it clearly does. Regulatory inspections comes AFTER a precautionary injunction.
The TYPE of legal rules to apply here will probably be about “equitable remedies” or something similar.
People are trying to sell it on eBay in the price range $10 – $25. You will hardly find ANY customers paying the $49.90 per month full price after the first month.
Look at the FACTS rather than applying your own ideas?
* In Brazil, TelexFree bought Voxbras, a small telecom company (compared to the market), a few months before TelexFree was shut down. But that doesn’t mean TelexFree was selling internet packages. TelexFree only sold VOIP subscriptions and AdCentrals.
* TelexFree started to build ONE Best Western Hotel, but that doesn’t mean TelexFree was operating hotels or selling vacations through the network. It was simply an investment and a marketing method. The hotel project is now under administration by the court, to preserve the investment.
* The shopping site was an idea that derived from the U.S., a few months after the shutdown in Brazil. TelexFree Brazil clearly didn’t sell that type of service.
* “Over priced” will be reflected in the price people actually can be willing to pay for the service when it’s not bundled with an opportunity, and most people are only paying a small fraction of the full price. How you describe the service won’t change that fact.
Facts should normally be about realities, but you were mostly repeating marketing statements.
Would you can the pedagoguery. It does not wear well. If you have something to say, then just say it without the pedantry, attitude and bloat. Too many words, way, way too many words.
So long as we don’t get into 1000 comment arguments about it, I think M_Norway’s contributions are actually helpful to some readers.
We get people from all walks of life here and sometimes what I write isn’t broken down enough for them.
I agree, sometimes.
I also just don’t have the time to address all the comments on here personally, so I appreciate the help.
One of them is a purported cell-phone service, but the TelexFree troops have been instructed not to identify the carriers.
TelexFree’s stance on this reminds me of when Zeek instructed its troops not to contact vendors. Zeek was DOA a couple of months later.
Another purported TelexFree product has something to do with credit repair. TelexFree members might be wise to question why a purported VOIP firm is getting in the credit-repair business and thus offering an incongruous “product” mix, especially since certain members of the AdSurfDaily Ponzi scheme where in the credit repair/debt elimination business before they plundered the ASD masses.
On a more practical level: Brazil soon will host the World Cup and in 2016 will host the Olympics. This means that many reporters from many nations will be in Brazil and will seek to supplement their coverage with stories about Brazilian life.
I just don’t see the Brazilian government letting Ponzi/pyramid schemes run rampant in the country, especially in the run-up to these major world events when the spotlight is shining so powerfully on Brazil.
And I think there are at least a couple of nations looking to improve relations with Brazil and that these nations could help Brazil clean up its Ponzi/pyramid mess before the first two teams take the field in the World Cup.
What do you think, Shy Danielle? Put another way, do you think Brazil wants to see throngs of T-shirt wearing TelexFree reps trying to cherry-pick new recruits outside the stadiums and coaching them to register outside Brazil — and perhaps trying to enlist the players from 32 teams?
PPBlog
Focus on the case itself rather on my comments? If you feel something is wrong then add corrections to it, but don’t replace any statements with your own ideas, and don’t analyse anything out of context.
Here’s my statement:
“I have simply recalled some details from memory. “On behalf of consumers” was an additional aspect of the case, not the primary aspect.”
A correction to that should normally have been something about that “on behalf of consumers” actually was the initial aspect of the case, e.g. “The case was clearly a consumer protection case right from the beginning, it wasn’t something that was added later. The initial order clearly stated what the case was about = (your own arguments for that)”.
Ppblog, Oz, Hoss, Norway,
I think a smart prosecutor would negotiate a settlement with terms that stopped objectionable practices and allowed the company to continue in accordance with an agreed upon structure and payment of certain accrued expenses.
I think PP, if smart, resolves everything before these major events. I see resolving it in a way that is least likely to piss off the alleged 1 million Brazilian promoters. The question is will the company agree to the terms the prosecutor might demand.
I did.
You are the only person I have ever encountered that spends so much energy telling others what they should have said. I said it. Deal with it. If you disagree say so and explain why. Convince me, and don’t tell me what I should have said, because if I agreed I would have already said it.
I realize that is the hope of the Telexfree supporters. I have seen blogs where the writer opines that the government will capitulate and settle because there is not enough money in the budget and that the “new” compensation plan is compliant etc.
Whether it is smart for a prosecutor to settle on the basis you have mentioned is unknown, in part because it does nothing to address past acts that may be have been criminal.
Oz,
You may claim to know but I certainly do not claim to know how many retail customers they have. I have never seen their books to “know.” PROSECUTOR WILL HAVE TO DO MORE than claim to know.
Frankly, it does not seem too hard to me to have retail customers. I am making money I got a mom, dad, sister, brother, aunt, uncle, cousin, grandpa and ma to put on the service as “retail customers” of a universally used phone product, right?
That was your own ideas rather than mine?
You introduced your own ASSUMPTIONS of some ideas you believed I had, and then you posted corrections to your own assumptions. A method like that doesn’t make any logical sense, it will be similar to having a heated discussion with yourself about details.
My statement:
“It was initially brought on behalf of MP-AC, rather than on behalf of the consumers. The consumer protection aspect was added later”.
I tried to identify the initial aspects of the case. I didn’t try to identify the exact and detailed role of MP-AC. You have probably focused on some details rather than the whole context?
MP-AC seems to have multiple functions, so you might want to correct your own ideas. But you can’t expect me to derail into a detailed discussion about it.
How much do they pay for the service per month? And do they actually USE the service, or have you simply added them as “customers” to qualify for commissions?
There’s a clear difference if the product is sold at a full price to retail customers for more than the initial month (where they are bringing in fresh money from the outside), or if people simply are signing up family members to qualify for commissions.
Hoss,
The civil AG deals with the civil case and desired or achievable outcomes and refers the criminal to the criminal prosecutor. However,the criminal matter has to apply specific penal codes that the conduct clearly violated. Most will also require a showing of intent. The civil AG has a much free hand.
I think you’re right, it could be handled that way. I don’t expect it but life is full of surprises.
Your idea was that the action was filed on behalf of the MP-AC. I think I have illustrated why that is incorrect and why it instead was filed on behalf of the consumers/citizens of the State of Acre. Do you disagree?
The first part is correct, the second part is simply derailing from what the statement was about. You have focused on some details and have interpreted them out of context with the rest of the comment.
The comment wasn’t about details like that, it was an attempt to identify the case correctly, whether it was clearly identified as a consumer protection case right from the beginning or if that part was added later.
TelexFree was shut down by a precautionary injunction in June 2013, filed by MP-AC “on behalf of itself / its own duties”. A description like that is rather vague and general, it doesn’t specify any of the ideas you focused on.
You applied a specific idea to it, your OWN idea = “MP-AC doesn’t file legal actions on behalf of itself, it’s representing the State and the people”. That idea may or may not be correct, but you have actually derailed from the topic.
Norwegian Follies
Norway says: I think the object is a glass mirror because I can see my reflection in it.
Hoss: I think the object is a shallow bowl of water because I can see my reflection in it.
Norway says: Its a mirror because the surface appears to be a thin layer of mercury covered with glass
Hoss says: The object is a bowl of water because I can pick up the bowl and pour clear liquid into my mouth which smells sweet and tastes like water.
Norway says: Its a glass mirror
Hoss says: How do you know its a glass mirror?
Norway says: Because I can see my reflection in it. (Again)
Hoss says: But you can see your reflection in a bowl of water too, and since I just took a drink of water out of this bowl it can not be a glass mirror.
To which Norway replies
Boing – Sprong – Weat.
And you accuse me of derailing?
Looks like a consumer protection case from day one, until the Judge ruled otherwise. What do you think?
Whether you want to engage reality or not is neither here nor there. There’s never any retail in Ponzi schemes, court documents from regulators prove this time and time again.
Of course, like simply hold up the member database (which will include maybe 5 retail customers) that the court has already ordered they hand over.
It is when you’re charging $50 a month for Skype and have attached a giant AdCenetal investment Ponzi scheme to it.
Those would be fake accounts used for commission qualification. Same shit in Zeek Rewards, failed miserably when the regulators got involved.
Talk. Here in Brazil has bundled TV, Internet, and a shopping site operated by Telexfree. It’s been more than a year who speak those things here, but there is none of this exists here in Brazil.
The only thing I have here is to say VoxBras, telephony company operating in two Brazilian cities of medium size. And a hotel in Rio de Janeiro hotel is still in earthmoving, has no brick placed there.
Conversa fiada. Aqui no Brasil não tem bundled tv, internet, and a shopping site operados pela Telexfree. Faz mais de um ano que falam essas coisas aqui, mas ainda não existe nada disto aqui no Brasil.
A unica coisa que dizem ter aqui é a VoxBras, empresa de telefonia que opera em duas cidades brasileiras de medio porte. E um hotel no Rio de Janeiro hotel ainda está na terraplanagem, não tem nenhum tijolo colocado lá.
In my town I know some 100 promoters Telexfree, but do not know a single person who bought voip retail. In short, this is not sustainable al.
Na minha cidade eu conheço uns 100 divulgadores Telexfree, mas não conheço uma unica pessoa que comprou voip no varejo. Resumindo, isso ai não é sustentável.
M_Norway,
The customer would pay the normal monthly rate of 49 whether relative or not, of course.. How or whether the customer uses the service is not relevant.
I do not use my bundled landline more than once every 4-6 months. You do not expect the gov’t to check how a purchased service or item is used are you.
How many people have brand new items in their closet that they have not used. I keep my landline because I want the service AVAILABLE for my use. Why would this disqualify me as a bonafide customer.
I stick with the belief that merely having a percentage of non-promoter customers i too easy. I think worth and non opportunity based profit that indicates whether or not the company is sustainable is what is important..but maybe that is just in the USA.
Seriously?! What morons are paying for MLM products and not using them?
Reality check please.
Right. Cuz a bundled product or service is the same as shelling over $x a month for one.
If your landline was $50 a month standalone and you could get it for $10 elsewhere, would you continue to pay for it? Of course not. Thus the company selling the service would go out of business.
…unless they were selling AdCentral Ponzi investment positions on the side.
By all means stick to those beliefs, but don’t confuse them with reality.
Oz, big news:
British Police releases an official warning against Telexfree:
http://www.jersey.police.uk/news-appeals/2014/february/scam-warning/
Since most of the Community involved is Portuguese, they also released a Portuguese translation:
https://www.facebook.com/guernseypolice/posts/396299853847950
Telexfree is under investigation in the USA. It can be shoot down at any times.
Thanks for the tip Frontier, I’ve published a writeup here: https://behindmlm.com/companies/telexfree/british-police-issue-telexfree-scam-warning/
@Lee Yang
What makes you think that?
You can read BehindMLMs’ coverage of who revealed that TelexFree is under examination in the USA here: https://behindmlm.com/companies/telexfree/acre-pp-telexfree-under-investigation-in-the-us/
Right, then why is it that TelexFree is holding up on the database the prosecutors demanded:
https://behindmlm.com/companies/telexfree/telexfree-claim-no-affiliate-data-fined-again/
Anyway – I feel sorry for TelexFree people. They insist on giving credit and believing in it after their “marketing director” mentioned BY NAME an insurance company in a video, only to have said company deny such partnership with TelexFree and then mr. Marketing Director said it was the affiliates’ fault for spreading the word that they had a contract with the insurance company even though HE SAID IT HIMSELF IN A VIDEO.
Well, it’s like that ol’ saying… “Fool me once, shame on you. Fool me countless times making me gladly throw my savings at you while you outright lie to my face, shame on me.”
Troy Dooley has a video up on TelexFree…
Troy:
stop excusing the principal’s actions! You almost sound like a TelexFree International apologist! It almost makes me wonder if they’re a client now of yours, or soon to be. Their program is too sophisticated in its design to have been an “accidental” pyramid scheme-they know what they’ve been doing from one day one!
They are only making changes now to their pay plan because they know they’re an illegal pyramid scheme as structured and promoted, know they’re facing increased scrutiny and likely under investigation in the U.S. (if one believes the Brazilian prosecutor, which I do, and even if she hadn’t had made her remarks, anyone with knowledge of the case in Brazil and awareness of a 1999 inter-country and inter-agency agreement between the DOJ and FTC and their Brazilian counterparts would know that Brazilian authorities could have requested the U.S. to investigate (is there any doubt that such a request was likely made?), which the U.S. would be obligated to do under the 1999 agreement, and as a result of a “positive comity” clause in that agreement, would share information about their investigation with Brazilian authorities).
Not to mention the legal issues that TelexFree and/or its U.S. entity, TelexFree International, have encountered in other countries such as Peru, and now with the police in the UK.
They are only making these changes in order to either pre-empt or minimize the regulatory action they know they’re likely to get with, both in the U.S. and other countries! The principals, the program as structured and promoted, and their reps and their claims are in so many violations of FTC and SEC rules that they’re likely to end up as a case study on illegal pyramid schemes in the future, and we haven’t even got into why the IRS would likely to be taking a close look at the company!
“They really want to do the right thing?” I almost fell out of my chair when you made that remark! Yes, lets con people out of hundreds of millions of dollars, and then right as we begin to experience legal issues, let’s make changes so that we can continue operating! Lets just hope that the regulators don’t fall for it!
Its rather common knowledge that their U.S. entity is circumventing the Court ruling in Brazil and signing up and paying Brazilians, which makes your “they really want to do the right thing” comment hilarious! Personally, I hope they throw the book at the principals, throw them in jail for a few years, and then bar them from being involved in any future network marketing opportunities like they did with Bill Gould in the Equinox case.
As far as the changes they’re making, based on the ones I have seen, and which are rumored to be the ones they’re going to announce, they’re more cosmetic in nature in the long run than they are substantive, illusory to the extent that they are being implemented to provide some cover from the regulators, but really don’t dramatically overhaul the program.
Guess we’ll have to wait and see the actual changes, which I’m sure will be pitched as “positive enhancements” when those of us with half a brain and an ounce of common sense know the real reason for the changes and why they’re being done. You can put all the lipstick you want on a pig to dress it up and make it look different, but it’s still a pig!
And Babener and Sheffield? LOL…not sure why Babener would be needed since they already had Nehra…but usually where Babener is, Sheffield is there or isn’t far behind….
And Sheffield’s far from being the “best in the business,” but I understand why you have to make such comments – one never knows when he might offer you a consulting gig, so you dont want to burn any bridges and have to be politically correct whereas I don’t have to be…
I saw a video from someone on his team (at least that is what was claimed) a while back discussing the legality of the TelexFree program and was stunned at her lack of knowledge of regulatory compliance in relationship to how the TelexFree program worked! Her “analysis” was laughable! If that’s the quality of his people, then the company is in serious trouble, as if they aren’t already!
Today Troy Dooly put out a video updating his thoughts on Telexfree. It didn’t seem to me that Dooly did his diligence.
Aparently he had some contact with Telex Top dogs who blew smoke up his ***. He said they need to be able to “control the field”. That makes me think that the dogs whined to
him that they can’t control how the reps present Telexfree. Reeeeally? Is this the “blame the sheeple” time?
Does he really believe that San the ponzie scam man doesn’t know what he’s doing? These guys knew exactly what they were doing when they were sitting around the kitchen table designing Telexfree.
I actually got the feeling Dooly felt sympathetic towards them. Hey, the guys just got overwhelmed with the growth of the company and all that money they were making so they lost track of how many voip products were being sold….hello…none?
Dooly said there has been a top legal team hired by Telex to help them make the business compliant. (is that because they know it isn’t?) Telex Top Dogs know exactly what they’re doing. No one joined Telexfree to create a real business. Come on.
Telex dogs read this blog all the time. The information here is free….they could have saved a lot of money in legal fees by taking the advice given here.
And why did the Dogs talk with Dooly, but keep there tails tucked in at the thought of coming here to this blog to defend their business if they feel the critique and criticisms presented here are unfare and incorrect.
Hey Steve Labriolla, global marketer? I think it would be “awesome” if you would come here for a discussion and straighten us all out. Tell us how legit you are? You have Telex fans all over the world that would love to see you come toe to toe with Oz and put him in his place.
Oh, I forgot, you’re in Spain this weekend picking pockets.
Of course, Troy tried to downplay some of his positive spin for the company…here was my reply:
Troy-the principals both knew how to stop the flood in the first place (never launch an illegal pyramid scheme designed as a network marketing opportunity and built around an investment program that targeted millions of uninformed, misinformed gullible people with promises of guaranteed incomes and 300% returns on what they put in without having to do anything) and the principals were unwilling to stop it for obvious reasons!
Not only have they done nothing to stop it, they’ve actually encouraged it! Furthermore, it has nothing to do with momentum! You make it sound like the momentum, the growth is what has led to their legal issues and improper claims made by reps in the field, when the reality is the momentum, the growth, and the claims made by reps is a by product of their illegal program! It has everything to do with how the program is designed, structured, and works-the reason for the growth is the investment aspect to their program, guaranteeing people a weekly income over 52 weeks with returns of 300% and more in a matter of 12 months, all without having to sell anything, recruit anyone, or do much of anything. That’s illegal in more ways than one, and that’s the reason for their growth, regardless of the illegal claims being made by reps in the field in the promoting of the program. Those illegal claims, which you do reference to your credit, is the cherry on the sundae for the regulators, but you make it sound as if the improper and illegal claims are what led to their growth and is the reason for their legal woes, and it’s not..
Furthermore, the illegal claims the reps are making happen to be the program as it designed! In order for the claims to stop, the company would have to totally revamp their program!
How you could possibly be of the opinion that with the changes they’re implementing that the program and pay plan will now be regulatorily compliant is beyond me, and nothing could be further from the truth! In order for their pay plan to meet regulatory scrutiny, they’d have to, among other things, get rid of the “elephant in the room,” the AdCentral Packages, and in doing that, you eliminate the appeal of the program, which is put $289-$1500-$15,000 in, get paid a guaranteed income for the next 52 weeks, and triple your money without having to sell anything, recruit anyone, or do anything, a very appealing message to millions of gullible people!
Take that aspect of their program out of the equation, they go nowhere, people quit in droves, and recruiting comes to a screeching halt! Nobody really signed up to sell VOIP-give me a break! There’s no money in VOIP, especially when the majority of the VOIP being sold is to their reps, and at $5 a month! The money was, and is, in recruiting people and getting them to “invest” $289-$1500, up to $15,000 or more! Without that revenue, the program collapses, and people’s incomes drop like a lead balloon! The VOIP was just a cover, an illusion to create the appearance of legitimacy!
You might want to re-shoot your video-I wouldn’t be caught dead making the statement “Their new comp plan looks like it is definitely going to be in compliance with the laws of the United States.” Unless they get rid of the AdCentral Packages in particular, along with a few other structural changes that have some meat to them, there’s no way their comp plan, regardless of what other changes they implement, would pass regulatory scrutiny!
By the way, here are the remarks of the Brazilian prosecutor regarding the U.S. investigation: It’s from one of Brazil’s 4 largest newspapers! http://globoesporte.globo.com/…/brasil-e-estados-unidos…
She is basically saying the Brazilian Federal Police, (who are investigating charges of money laundering in Brazil by TelexFree and its principals) are working with their U.S. counterparts (most likely the DOJ along with the Secret Service and Federal Marshals Service), she does not know how much progress has been made (likely since at the time of the quote the investigation would have just been starting), that since they believe money was illegally taken out of Brazil and sent abroad and likely made its way to the U.S. (allegedly TelexFree diverted $88 million USD out of Brazil AFTER the judge had ordered their accounts frozen, and after Brazil the principals went to the U.S. to launch TelexFree International, officially known as TelexFree Inc., so logic would tell you that in the minds of the prosecutor and Brazilian authorities some of that money made its way to the U.S.), such an investigation would make sense, and that the IRS and other organs (agencies) were also investigating (which would also make sense for a number of reasons, not the least of which is an intercountry agreement that took effect in 1999 between the FTC and Department of Justice (who often do inter-agency investigations with the likes of the IRS and Secret Service) in the U.S. and the Administrative Council for Economic Defense (CADE); Secretariat for Economic Law Enforcement (SDE) in the Ministry of Justice; and the Secretariat for Economic Monitoring (SEAE) in the Ministry of Finance in Brazil.
In addition, the 1999 agreement includes a provision on “positive comity” under which each side may notify the other when it believes activities in the notified country are having an adverse impact on the notifying country; the notifying country may request the notified country to take the appropriate law enforcement action under its own laws before the notifying country undertakes any enforcement action under its own laws. The agreement also provides for the sharing of information and evidence related to enforcement and for regular consultations between the parties.
It is highly likely, for a number of reasons, that Brazilian authorities would have requested the U.S. to take action, beginning with an investigation, which they would be obligated to do under this agreement, and then appropriate legal action if warranted. Knowing that the program has been shut down in Brazil for being an illegal pyramid scheme, and knowing that the U.S. has a variety of statutes and agencies that can pursue a network marketing company and opportunity for being an illegal pyramid scheme, would it surprise anyone, knowing the number of FTC and SEC rules that TelexFree International and its reps have violated, that such an investigation in the U.S. would likely be occurring? Anyone with common sense can see what’s coming, regardless of the “changes” they make to their program!
So, while such an investigation would not be known in the U.S. as U.S. regulatory and enforcement agencies typically don’t announce an investigation until they are ready, and usually after having taken some preliminary action like a TRO or injunction, that doesn’t mean that one isn’t occurring, and based on her remarks, having knowledge of the 1999 inter-country agreement between the leading law enforcement and business competition agencies of each country, and common sense, one could reasonably conclude that such an investigation in the U.S. is likely happening.
This guy already knows how the SEC views his activities. Is he dense. He needs to put a huge disclaimer on every opinion he expresses and yet I do not hear him doing that.
In a way, I can’t fault Dooly, as he’s sticking up for his buddy Gerry “I see no Ponzi” Nehra. But he should really think about what sort of crap good old Gerry will drag him into this time.
The $88 million was later corrected to $101.7 million. It was about 2 transactions made the same day the injunction became publicly known, 2 transactions to 2 other TelexFree-owned companies, where VoxBras was one of the companies. Both transactions were about appr. $50 million, and both transactions were stopped.
TelexFree’s defense argument was that the transactions were “scheduled payments for services delivered by those companies”, and that they happened before the assets had been frozen.
The story was published around 2 weeks after the shutdown on June 18th = late June or early July. It was first published as $88 million, but corrected to $101.7 million after a couple of days.
But people will know what you’re talking about anyway, the details are not that important. I added the information to avoid misunderstandings, i.e. $88 million and $101.7 million are about the SAME case rather than about 2 different cases.
Somebody once said that “Two wrongs don’t make a right.”
$88 million was first mentioned in a comment in early July, and later mentioned in one article July 8th.
https://behindmlm.com/companies/telexfree/telexfree-denied-acre-appeal-injunction-remains/
The correction was made when the details became known, e.g. the details about which companies the amounts had been transferred to (attempted transactions).
Assets freeze and transaction control were handled by the central bank, Bank of Brazil. The 2 illegal transactions were detected as a part of that procedure, i.e. they checked transactions a couple of weeks back in time.
i think you guys forgot one thing in the article up there when i read this calculation:
$20 a week is $80 a month, VOIP at retail costing $49 only leaves an effective monthly ROI of $31. That’s $372 annually on a $289 investment. Add on the 20% mandatory re-investment TelexFree on every position after 12 months, and it gets even worse.
just pointing out that the 49$ above, the referrer gets credited most of that purchase. 🙂
The VOIP subscription could be disabled after the first month. People could simply let the invoice remain “unpaid”.
If people were interested in the VOIP service, they could generate a new sub account each month (recruit or sell to themselves), pay the $49.90 and receive $44.90 in commission.
Found on Faith Sloan’s site under new comp plan:
Am I understanding this right?
So new comp plan but Telex is still going to keep up scheme for those that signed up under original plan? Wonder what SEC thinks of that?
In addition to explaining that to the SEC, there’s also the issue of how exactly are they going to pay out investors who’ve dumped money in these last few months. You can’t conjure up >100% ROIs out of thin air and even six months down the line it’s not hard to see them running out of money.
The new changes look like TF management’s escape plan.
@OZ I agree.
It’s going to implode however as far as an escape plan?
The arms of the law are long.
Faith Sloan has a Telex melt down. On her site she lambasted Randy Crosby (a promoter) and Santiago de la Rosa (ponzie punk) over frustration of the compensation plan changing again and….then again…and still again.
Aparently a secret meeting was held by top dogs and permoters (after the Boston “training”) that she wasn’t included in and where decisions on compensation changes took place. She also complains of no products coming out, just a lot of awesome lip flapping from corp. (she just noticed that?)
She writes:
She doesn’t sound happy.
As I said in a previous post. Not sure if I would be more scared of the SEC or Faith Sloan. Sounds like trouble in Ponzi Paradise.
Wasn’t it….Steve Labriola?…that said there is no investigation into Telexfree going on in the USA? I’m begining to wonder if either Steve doesn’t know what’s going on in his company or if he is just “truth challenged”?
They’re changing the plan again? What’s wrong with everyone required to get 5 customers?
You’re telling me TF affiliates can’t find 5 VOIP customers? Oh dear… who would have thought?
Try truth handicapped. I’d be taking anything he says with a grain of salt after the “there’s no investigation” lies.
@Oz I agree.
Let’s see said the Telex newbie, I’ve heard that the Telex voip product is “awesome” and crystal clear. And you can call 40 different countries. ( I don’t know anyone in even 5 of the 50 states in the USA but I love having the option). Also, now I can sell an app that goes along with it.
50 customers? I should be able to find 500 customers with the great training TF offers along with access to the internet, a quality product, and at the amzing cost of only $49.00 above free?
No sweat.
From stage right, Carlos will demonstrate the long awaited app from Telexfreeeeeee……Clap Clap Clap.
One Telex guy in the audience leans over and says to the other Telex guy…Yo that’s aaaaawsome….The other guy say’s.. Duh yeah….but when are they going to talk about paying me for placing adds? 🙂