TelexFree halts operations
TelexFree, the Marlborough firm accused of running a pyramid scheme aimed chiefly at Brazilian and immigrants, has stopped operations as it pursues Chapter 11 bankruptcy protection.
An announcement on the home page of its website says TelexFree, whose business model involved VoIP (voice over internet protocol) services and other communications services, has suspended all business activity while the company addresses the Chapter 11 filing and action taken against it by the U.S. Securities and Exchange Commission (SEC) and Massachusetts Secretary of State William Galvin.
On its website, TelexFree said it continues to believe “strongly” in its VoIP product and direct selling model and hopes to resume business. “At this point, however, we do not know when or if we will be able to persuade the Bankruptcy Court and other legal bodies of the value of our VoIP service and the potential new TelexFree products, and the viability of the TelexFree business,” the statement read.
Galvin and the SEC last month accused TelexFree of running a pyramid scheme in which Brazilian and Dominican immigrants were promised a 200-percent return on investments of $289 or $1,375 by recruiting new members and placing advertisements on free Internet ad sites.
TelexFree filed for Chapter 11 bankruptcy protection April 14, one day before federal agents raided the company’s offices at 225 Cedar Hill St.
According to published reports, the company’s co-owner, James Merrill of Ashland, was arrested earlier this month, just days before Katia Wanzeler, the wife of co-owner Carlos Wanzeler, was apprehended John F. Kennedy International Airport in New York City as she allegedly tried to leave the country.
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