BehindMLM: Homeland Security raids TelexFree???


Dept of Homeland Security raid TelexFree offices

Apr.17, 2014 in TelexFree 16 Comments
department-of-homeland-security-raid-telexfree-officetelexfree-logoOver the past twenty-four hours I’ve been seeing a lot of genuine concerns raised by TelexFree affiliates being answered with the proclamation that tommorow April the 17th, the company will be given permission to restart business operations.

Mostly pushed by Portuguese speaking TelexFree affiliates, social media related to TelexFree has been flooded with claims like this:

Santiago D Apostle: the motion for Chapter 11 bankruptcy is approved… and the company is given the chance to reorganize and restructure inspite of the SECs complaint filed against TelexFREE.

The root of the blatant misrepresentation of what was actually granted is an order granting TelexFree a “shortened time” to hear their “first day motions and applications” in the case. The hearing has been scheduled for April 17th at 1:30pm, with the order signed off on by Judge August B. Landis.

The problem?

All signs point to the Massachusetts Securities Division stopping the application dead in its tracks.

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BehindMLM: TelexFree Has More Problems…

Massachusetts charge TelexFree as “billion dollar Ponzi”

Apr.15, 2014 in TelexFree 140 Comments


telexfree-logoEver since the SEC investigation into TelexFree was officially confirmed, I’ve found myself repeatedly pointing out to disillusioned TelexFree affiliates that the running of a Ponzi scheme for nearly two years cannot be negated by cosmetic product changes.

Nor can it be erased by a “too little too late” compensation plan change.

Hell, not even a shutdown and filing for Chapter 11 bankruptcy can wash the stink of what Carlos Wanzeler, Carlos Costa and Jim Merril have spread over the MLM industry.

And now, having concluded their investigation into TelexFree – the Massachusetts Securities Division has finally played their hand and agreed. TelexFree is a “billion dollar Ponzi scheme”. [Continue reading…]

BehindMLM: TelexFree and Labriola’s latest comments

Labriola: TelexFree bankruptcy “the most awesome thing”

Apr.15, 2014 in TelexFree 29 Comments

telexfree-logoIn the wake of TelexFree’s emergency filing for Chapter 11 bankruptcy over the weekend, Steve Labriola was once again abandoned by TelexFree’s owners and left to face the company’s affiliates alone.

Appearing telephonically on a hastily announced call and sounding more spectator than corporate management, Labriola tried to appease TelexFree affiliates with what little information he had.

There are tons of questions out there I know, and I don’t have all of the documentation back from our lawyers on the things that I can and can’t say.

All I can tell you is that the Chapter 11 we filed was to help us reboot, rebuild and reformat our company, so we can move forward and build.

This is what we want as a team. This is what we want as a corporation and this is what all of you will see will be the best thing going forward.

TelexFree’s CEO in hiding Stuart Macmillan was absent from the call, with Labriola stating this was conveniently due to his being “on a plane, heading down to meet with the new platform company”.


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BehindMLM: Ming Xu repentant about WCM777??

Ming Xu repentant about WCM777?

Apr.13, 2014 in WCM777 11 Comments

wcm777-logoRoughly two weeks ago we saw the SEC finally move in and shut down Ming Xu’s WCM777 Ponzi scheme. As I understand it, these last few weeks Xu has made himself available to the SEC as they continue to tie up any loose ends pertaining to the case.

In a series of tweets that hint at a finality to Xu’s personal input into the SEC case, a much more sombre sounding Xu shed the briefest of light on his side of the story.

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TelexFree Files Voluntary Chapter 11 Petition


TelexFREE™ Files Voluntary Chapter 11 Petitions To Facilitate Financial And Operational Restructuring

Worldwide Operations and Telecommunications Services Continue Through Restructuring Process

MARLBOROUGH, Mass., April 14, 2014 /PRNewswire/ — TelexFREE LLC today announced that it and certain of its subsidiaries and affiliates filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code, in an effort to address certain operational challenges. The petitions were filed in the U.S. Bankruptcy Court for the District of Nevada.  TelexFREE intends to use the Chapter 11 process to optimize its selling platform, address its liabilities and position itself to emerge as a stronger and more competitive company.

TelexFREE expects that it has cash on hand to support the business throughout its reorganization and to maintain services to its customers.  In connection with the Chapter 11 filing, the Company announced that it has conducted a thorough review of its operations, including its multi-level marketing and pricing structure, and has determined that adjustments will be necessary to more effectively capitalize on the strong demand for its voice over internet calling product, rationalize its promotional expenses and ensure that its sales programs are compliant with applicable legal requirements.

The Company announced its intention to restructure its debt obligations, unveil and promote new products (including its TelexFREE app and TelexMobile), and return to growing its customer base in an effort to realize the Company’s full potential to generate significant value for its constituents.

Stuart MacMillan, interim Chief Executive Officer of TelexFREE, said, “We anticipate that our global operations will continue to provide our customers with the high-quality products and services they have come to expect.  We are taking this major step because we continue to believe in our business, our products and the enthusiasm of our world-class team.  We believe that this restructuring plan, which will include significant enhancements to our governance practices and internal controls, will help us to build a stronger and more sustainable financial and operational foundation for the future.”

The Company has filed customary “First Day Motions” with the Bankruptcy Court which, if granted, together with the plan, will help ensure that the restructuring process proceeds in an orderly manner.

MacMillan continued, “As a result of the filing of the chapter 11 cases, TelexFREE anticipates that it will have the time to build a solid foundation based on a compensation plan that rewards sales associates and promoters for customer acquisition and the promotion of well-established and new products. Our collective success depends on our united commitment to offer our customers the finest communications products and services available anywhere in the world. I look forward to moving through the process quickly with the support of our independent sales associates during this transition and the ongoing dedication of our customers.”

Additional information is available on the TelexFREE website at  Court filings and other documents related to the reorganization proceedings are available on

Alvarez & Marsal North America, LLC is serving as restructuring advisor to the Company and Greenberg Traurig, LLP and Gordon Silver are serving as legal advisors to TelexFREE.

About TelexFREE

TelexFREE is a private company headquartered in Marlborough, Mass., with offices in a number of regions around the world. For more information, please visit


BehindMLM: TelexFree’s 2013 P&L doesn’t add up?


TelexFree’s 2013 profit-loss doesn’t add up

Apr.10, 2014 in TelexFree Leave a Comment

telexfree-logoA profit & loss statement recently filed in the US state of Alabama provides some insight into the financials of TelexFree.

Marked as an exhibit of an “application for interexchange authority”, the statement reveals that for the year 2013, TelexFree took in $689 million USD from their affiliates.

Affiliate commissions and other expenses ran up a liability of $652 million, leaving TelexFree with a “net income” of $36 million.

On paper that sounds great… until you consider TelexFree’s business model.

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TelexFree Applies for Alabama Licensing?

A “consultant” for TelexFree has filed an “Application for Resale Interexchange Authority” in Alabama. The cover letter is as fi=ollows:

Dear Sir:

Enclosed please find an original and one (1) copy of the TelexFREE’s Application for a Certificate of Public Convenience and Necessity to provide interexchange telecommunications services in Alabama. The entire packet was also filed electronically today. Enclosed also find the filing fee in the amount of $100.
Please acknowledge receipt of this filing by file stamping and returning a copy of this letter to the address below.

Questions concerning this Application may be addressed directly to me.

/s/ Joseph Isaacs
Joseph Isaacs
Consultant to TelexFREE

I have uploaded the full document for your perusal.   TelexFreeAlabamaApplication

BehindMLM: TelexFree flooded with fake customers?

TelexFree flooded with fake VOIP customers?

Apr.07, 2014 in TelexFree 17 Comments

telexfree-logoNo doubt as a result of the TelexFree narrative taking on a life of its own these last few weeks, ironically due to a complete lack of communication by the company itself, yesterday saw the release of two official TelexFree corporate marketing videos.

Featuring Steve Labriola, TelexFree’s “Director of Business Development”, the two videos revealed little new information, but there were two interesting tidbits that I felt were worth going over.

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BehindMLM: 2 New TelexFree Stories

TelexFree VOIP “impossible to sell”

Apr.02, 2014 in TelexFree 15 Comments

telexfree-logoYesterday saw dramatic scenes unfold at TelexFree’s Massachusetts’ head office, culminating in police being called to the scene to remove the company’s affiliates from the building.

What we weren’t sure on at the time was who called the police.

Luckily local Boston media were on location, with Wicked Local’s Daily News Staff reporting it was Steve Labriola himself who called the police on the affiliates.

Labriola said he called the police to intervene Tuesday when the crowd began to grow outside the company’s offices.

When asked if he might help affiliates get some answers by requesting management talk to affiliates, a Boston police officer who responded to Labriola’s call for help later told affiliates:

None of them are gunna come out man, they’re staying in there. They see this many people, they’re scared.

Affiliates gathered at TelexFree office to demand why the company, literally overnight, had made changes to their AdCentral investment positions.

Previously affiliates had been told there would be no change to their existing positions, with many expecting to be paid out their weekly $20 a week ROI per position for the remainder of the maturity period (52 weeks).

Short of trying to re-invent themselves as a “customer acquisition company”, TelexFree have thus far failed to explain the reason behind the changes. [Continue reading…]

Police called in after TelexFree change old contracts

Apr.02, 2014 in TelexFree 97 Comments
header-police-attend-telexfree-office-april-2014telexfree-logoDespite the uncertainty over TelexFree’s ever-changing new compensation plan, those that had previously invested funds before March were reassured their weekly ROIs would continue to be paid out.

This made little sense considering the company was under SEC investigation, but was largely seen as a way to keep their existing investors happy. I haven’t seen any official numbers, but TelexFree affiliates number in the thousands and there are purportedly over four million existing AdCentral investment positions active.

All was well until yesterday, citing “regulatory requirements”, TelexFree decided to renege on their earlier promises. [Continue reading…]