Who is telexfree

Those at the top of the pyramid make money, leaving those near the bottom holding the bag. There's no real revenue coming in," Andrew Lelling, U. A Ponzi scheme uses money from new investors to pay earlier investors. In a pyramid scheme, the earlier participants recruit newer ones, and they are all ostensibly selling a product. No pyramid scheme was bigger than TelexFree, which conned 1. Lelling says TelexFree is the largest pyramid scheme ever prosecuted by the Justice Department.

Charismatic co-founder Carlos Wanzeler, who moved to Brazil the day federal agents raided TelexFree's offices, faces a count federal indictment alleging conspiracy and fraud.

His business partner, James Merrill, is serving a six-year federal prison sentence after pleading guilty in 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. She had hoped to use her TelexFree earnings to pay for heart surgery. A pyramid scheme does not.

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Lelling and Neil J. Gallagher, Jr. You are here U. Attorneys » District of Massachusetts » News. Department of Justice. Wednesday, March 22, Topic s :. District Court Judge Timothy S. Facebook Twitter Email.