TelexFree US business plagued with “rampant fraud”
As Federal Prosecutors in Brazil contemplate whether or not they’re going to arrest and charge TelexFree’s top net winners with ‘counts of embezzlement and money laundering’, the US side of the company is now reeling from ‘rampant global credit card fraud’ and the effect it has had on their US banking channels.
On September 5th, the company sent out the following update to its affiliates:
NEWS – 05/09/2013 16:27
Due to the recent amount of fraud attempts over the last two weeks, for the next 15 days our bank has limited daily payments allowed by credit card.
On a TelexFree affiliate investor call held sometime within the last 24 hours, affiliates spent nearly forty minutes discussing how to get around TelexFree’s recent credit card problems.
The call, hosted by a man only identified as “Brandon”, begins with the brief pimping of some upcoming TelexFree affiliate events, before the credit card situation is discussed.
[3:54] For the past few weeks guys we’ve all had our challenges with people y’know, paying into (TelexFree). They’re trying to get their (credit) cards whitelisted.
And of course ladies and gentlemen I wanted to mention to everybody something that I got from Steve Labriola, so much fraud was coming into the company and yet you’ve got people waiting. People who wanna get additional contracts, waiting and can’t do it because their card’s not whitelisted or they’re getting declined.
Well yesterday the company made a very very really wise decision, and they decided to allow different ways of people paying into the system.
[4:40] Because of the fraud they had to cut down on the amount of credit cards that come through, they’re only allowing so many through per day.
Ways to get around the credit card restrictions include depositing investments into an upline’s bank account, after which the upline will then transfer their TelexFree virtual backoffice money in place of real money.
The above is described as ‘the quickest way’ new affiliate investors can get money into “the system”.
TelexFree affiliate Roy Lentz even went so far as to shatter Gerry Nehra’s carefully crafted pseudo-compliance facade, when he referred to affiliates “purchasing positions” in his post-call summary:
If you do not have to use a credit card through TelexFREE, then don’t. If you are buying additional positions, just send a cashiers check. A few days wait won’t matter too much to you.
And by doing this, it allows more new enrolments to come in and be able to use a their credit card. Allow others the chance to become a part of the TelexFREE family, and we encourage you to work with your Sponsor should you wish to buy more contracts.
The second fastest way provided for affiliate to quickly invest funds with TelexFree is via the direct deposit of money into TelexFree’s US bank account.
[5:5o] The second fastest way is going to be, with the new system, where you’re able to deposit money into the company’s account three different ways.
One, by TD bank, two by cashier’s check sent directly to the company or three by money order.
On the call the banking details for TelexFree’s TD Bank account and money orders are displayed:
Deposit inside USA information:
Account Number: 8250410334
Routing Number: 211370545
Address: 225 Cedar Hill St, suite 200
Marlborough, MA 01752
Please send Checks or Money Order to
225 Cedar Hill St, Suite 200
Marlborough, MA 01753 (sic)
PS. We only accept cashier’s checks or money order (NO CASH) to a maximum of $1425.00. Please put the invoice number in the memo.
Wire transfer Outside USA ONLY
Accounting Number: 8250410334
Routing Number: 211370545
Swift Code: NRTHUS33XXX
Address 225 Cedar Hill St, suite 200
Marlborough, MA 01752
The memo for checks and money orders is needed because TelexFree affiliates deposit blind, and are then required to inform TelexFree they have made a deposit, which the company then verifies via the provided invoice number.
Why the company is limited to accepting $1425 per check or money order is not explained.
As for TD Bank, they’re
a national banking institution in the United States (chartered and supervised by the federal Office of the Comptroller of the Currency) which offers banking, insurance, brokerage, and investment banking services in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Vermont, Virginia, and Washington, D.C.
For reasons not apparently clear, apparently affiliates are not permitted to circulate the above banking information publicly. The following warning was sent out by TelexFree affiliate Kelly Tolar shortly after the conference call:
NO ONE IS ALLOWED TO PUT TD BANK ACCOUNT INFO on any (ANY – ANY) social media site.
Please go and remove any account numbers posted – here on facebook also.
**ALSO** NO DEPOSITS TO THE TD Bank Account ~ A new account is being created next week.
Once again, why affiliates are not permitted to circulate the information or why the TelexFree’s TD bank account accepted deposits for such a short period of time is not clarified.
One other topic of interest discussed on the call that was news to me is the promise of new products that affiliates will supposedly be able to sell to customers. These include a $49 debt consolidator and coffee.
If the products are anything like TelexFree’s VOIP service however, they’re likely to offer little more than thin masking of the company’s affiliate-funded Ponzi investment scheme.
Looking at the ongoing problems TelexFree are experiencing it’s hard not to get a sense of Zeek Rewards dejavu. Widespread rampant credit card fraud, banking issues, affiliates accepting real money for virtual TelexFree backoffice money… throw in a penny auction, some DDOS attacks, an Office of Foreign Assets Control (OFAC) debacle and you’d pretty much be looking at a carbon copy of the series of events that led up to the SEC shutting Zeek Rewards down.
Given the mounting regulatory and legal problems TelexFree are facing in Brazil, looming charges of embezzlement and money laundering and the widespread “rampant” global fraud the company is exposing US banking institutions to, one can only wonder how long it will be before the Massachusetts Attorney-General and/or the SEC will step in.