TelexFree Scam - Largest Ponzi Scheme Ever

TelexFree Scam - Largest Ponzi Scheme Ever

Would you share this Article with others?  +

The TelexFree scam was the biggest Ponzi or pyramid scheme ever, which conned 1.8 million victims worldwide into paying a total of $3 billion to get into the scam, thinking it was a legitimate business. Lelling says TelexFree is the largest pyramid scheme ever prosecuted by the Justice Department. By contrast, Bernie Madoff's Ponzi scheme resulted in at least $17.5 billion in losses, but the number of investors who were cheated numbered in the thousands.

A Ponzi scheme uses money from new investors to pay earlier investors. In a pyramid scheme, the earlier participants recruit newer ones. The pyramid collapses when the supply of new recruits runs out, as it invariably does. Those at the top of the pyramid make money, leaving those near the bottom without their money.

Charismatic co-founder Carlos Wanzeler, who moved to Brazil the day federal agents raided TelexFree's offices, faces a 17-count federal indictment alleging conspiracy and fraud. His business partner, James Merrill, is serving a six-year federal prison sentence after pleading guilty in 2016 to 10 felony counts.

While TelexFree was ostensibly in the business of selling an internet phone service allowing free calls to Brazil and Latin America, participants were not expected to sell the product itself. Instead, they would spend their own money to buy ads for the service. They would be paid for cutting and pasting the ads online, and for recruiting other people to do the same.

When U.S. and Brazilian authorities began investigating TelexFree for what appeared to be an illegal pyramid scheme, the company declared bankruptcy and froze members' accounts, leaving millions of people around the world in the cold.

"They took money from people that (were) not rich. They are greedy," TelexFree member Eloites Euriques said, referring to Wanzeler and Merrill. "They wanted more money, but they have to think what they did for poor people and sick people like me."

Euriques, who suffers from multiple ailments, lost her life's savings of more than $20,000. She had hoped to use her TelexFree earnings to pay for heart surgery.

Note: Some of the names, addresses, email addresses, telephone numbers or other information in samples on this website may have been impersonated or spoofed.

Check the comment section below for additional information and share what you know or ask a question about this article by leaving a comment below.

Remember to forward suspicious, malicious, or phishing email messages to us at the following email address: info@onlinethreatalerts.com. And, report missing persons, scams, untrustworthy, or fraudulent websites to us. Tell us why you consider the websites untrustworthy or fraudulent. Also, to quickly find answers to your questions, use our search engine.

You can help maintain Online Threat Alerts (OTA) by paying a service fee. Click here to make payment.

Comments, Questions, Answers, or Reviews

There are no comments as yet, please leave one below or revisit.

To help protect your privacy, please do not post or remove, your full name, telephone number, email address, username, password, account number, credit card information, home address or other sensitive information in or from your comments, questions, or reviews. Also, remember to keep comments, reviews, answers respectful.

Write Your Comment, Question, Answer, or Review

Write your comment, question, answer, or review in the box below to share what you know or to get answers. NB: We will use your IP address to display your approximate location to other users.

Your comment, question, answer, or review will be posted as an anonymous user because you are not signed in. Anonymous posts cannot be edited or deleted. Sign-in.

Keep your comment respectful or it will not be posted.

TelexFree Scam - Largest Ponzi Scheme Ever