Telex Free ?

dv8

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Sep 27, 2006
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i have never even heard of them before the big blow up this week.
 

caribmike

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Jul 9, 2009
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They were nuts about it here in the East. I told many who asked me not to fall for it (including my wife ;)) since it is a fraud. Yet many dumb enough did lose money. Well, not us...
 

palito de koko

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Nov 23, 2013
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They were nuts about it here in the East. I told many who asked me not to fall for it (including my wife ;)) since it is a fraud. Yet many dumb enough did lose money. Well, not us...
A friend of mine that lives in Higuey told me about TelexFree something like 2 months ago

But in Pto Pta where I live I have never heard of that company
 

caribmike

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Jul 9, 2009
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Google them. They did the same scheme before in Brasil etc. MLM / pyramide s**t.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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We were approached several times.

It made no sense as far as the product was concerned, not did they ever really pitch the product. I do know 3 people who did it, but I don't know what they're thinking now. As I understand, they "made" some $$$ with it...
 

dv8

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i read few articles about this and i still do not understand how it was supposed to work and what exactly they were selling.
 

cobraboy

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Jul 24, 2004
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i read few articles about this and i still do not understand how it was supposed to work and what exactly they were selling.
They were selling their own brand of discounted VOIP...but with a weird MLM thing attached.
 

Lothario666

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According to DR1 News for April 16, 2014,
Most of the targets for the alleged scam were working and living in the east of the country. In the San Pedro de Macoris and La Romana, areas certain church leaders had promoted the deal to their followers as having the blessing of God.
 

dv8

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They were selling their own brand of discounted VOIP...but with a weird MLM thing attached.
yes, i understood this much. but there is something about buying some advertisement kits? what's that about?
 

playacaribe2

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Jan 9, 2004
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yes, i understood this much. but there is something about buying some advertisement kits? what's that about?
This will likely be one of the largest Ponzi schemes in the world.

SEC freezes assets of TelexFree and eight people affiliated with the company’s alleged fraud - Business - The Boston Globe

http://www.forbes.com/sites/jordanm...s-allege-telexfree-is-1-billion-ponzi-scheme/

http://www.forbes.com/sites/jordanmaglich/2014/04/17/sec-halts-telexfree-pyramid-scheme/

My office will likely represent a number of people that became involved with Telexfree.



Respectfully,
Playacaribe2
 

dv8

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i understand that it was a ponzi scheme, i just do not understand those "advertisement kits" they were selling. would you mind explaining that?
 

playacaribe2

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Jan 9, 2004
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i understand that it was a ponzi scheme, i just do not understand those "advertisement kits" they were selling. would you mind explaining that?
The advertising kits were a part of the pyramid scheme itself.

"Investors" bought a package that included a VOIP plan....that no one cared about. Inside that "kit" investors could earn points by bringing in other investors AND by posting 5 ads per day to a website that, as I understand it now, belonged to the company. If they did that they would earn the equivalent of $100.00 per week in points. For a while these "points" somehow could be transferred to e-wallet and then used to pay bills etc. Investors could also cash out their points when they brought other people into their circle or downline and those new people paid cash to them to join. Points were also sold amongst investors when they needed cash...an investor received cash from one investor and then transferred his/her points to the other investor.

The problem is, people mindlessly posted 5 ads per plan per day and accumulated points in excess of the actual cash brought into the system by new investors. These ads were mindless, meaningless and did not really do any advertising...as they were all submitted to the company website.

There were even automated services that developed to help people post ads....some people bought plan after plan and needed to post hundreds of ads a day to earn "points" that they would trade amongst themselves, and all believed they were rich......and like most Ponzi schemes...some did get rich....the rest are now littered on the highway of broken dreams.

In typical pyramid/ponzi fashion as recruitment slowed and the "point" balances swelled, the company was unable to meet the demand for points to be turned into cash. In March of this year they changed the compensation plan actually demanding that people actually sell VOIP plans....not just mindlessly post ads.

That was the tell. The company was quietly running out of cash to pay people for the points they accumulated posting these ads for the company.

Early this week with state and federal authorities moving in, Telexfree filed bankruptcy in Nevada for 3 Telexfree companies. Regulators, state and Federal, filed Complaints and immediately searched the company and seized its records.

The rest of the story....is still unwritten.


Respectfully,
Playacaribe2
 

playacaribe2

Well-known member
Jan 9, 2004
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Do you see any chance for anybody to get any of his money back in the near future?
So the question really needs to be two-fold.

Can telexfree survive a Chapter 11 reorganization? Assets are currently dwarfed by liabilities....but anything is possible.

However, the company as it exists today, will likely not be the company that emerges from Chapter 11......then #2, can the principals survive what appear to be indictments coming from both the fed and state?...soon.

Sadly, I see little hope for any meaningful recovery......ever. Lots of people in the DR were caught up in this thing....and apparently one of the people named in the federal complaint is a dominican....which may help explain why this caught on so big in the DR.

For those so interested...here are the bankruptcy filings for all three companies;
http://www.kccllc.net/telexfree/document/impdates/a/7020?nh=1

Respectfully,
Playacaribe2
 
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