More than 1,000 victims of the TelexFree Ponzi scheme showed up at a meeting in the Mary C. Burke School on Oct. 29 to get information and to get help filing a complaint with the state. The event was coordinated by the Chelsea Collaborative, which is organizing victims.
Last summer, in the wake of the exposure of one of the largest Ponzi Schemes ever in the U.S. – one directed at the Spanish-speaking and Brazilian communities – Chelsea Collaborative Director Gladys Vega and Chelsea Police Officer Rosalba Medina decided to host an open house for victims in Chelsea.
They expected a few dozen.
They had nearly 300 show up.
That spawned an even greater effort by local law enforcement and the Collaborative to identify victims of the scheme and provide information and help to those that had lost investments. Last Wednesday night, Oct. 29, at the Mary C. Burke Complex, more than 1,000 victims travelled to Chelsea to find out more information about what can be done to help them recover the hard-earned money they lost.
Folks came from as far away as upstate New York and Connecticut and from as close by as Congress Street and so many other neighborhoods in Chelsea.
“A very large number were low-income immigrants from Chelsea, including many people we know that were silent victims of the crime,” said Vega. “The Collaborative is helping a family of two, a husband and wife, that invested $206,000 in February, 2014, and TelexFree went bankrupt in March 2014. The family lost all the money they invested.”
The scam has been a common complaint, Vega said, amongst many people who have come to the Collaborative for various services. While there for one reason or another, the subject of TelexFree has routinely come up.
Vega said they felt it was important to bring everyone together to learn about what happened and to help victims file complaint forms with the State Secretary of State’s Office and online complaint forms with the FBI.
The two men responsible for hatching the TelexFree Ponzi scheme, James Merrill and Carlos Wanzeler, have been indicted and face charges in Boston’s Federal Court. They are charged with conspiracy to commit wire fraud.
They were arraigned there on May 9 of this year, with Merrill being held without bail. Wanzeler has gone on the lam, fleeing to his native Brazil and his whereabouts are unknown.
It is alleged that the scheme netted some $1.2 billion from unsuspecting “investors,” most of whom were recent immigrants from Spanish-speaking countries or from Brazil.
The U.S. Attorney alleges that between January 2012 and March 2014, TelexFree aggressively marketed its Voice over Internet Protocol (VoIP) service by recruiting thousands of “promoters” to post ads for the product on the Internet. Promoters were required to invest a certain amount of money to buy in to the organization. They were compensated on a weekly basis as long as they continued to post Internet ads for the company.
However, only about 1 percent of the company’s revenues came from sales of the VoIP service, while the remainder came from new people buying into the scheme – a classic Ponzi scheme. Money from new members were paid to existing promoters until the alleged scheme caught up to its owners and the company went bankrupt.
The scheme also existed on immense peer pressure to join by family members, friends and even religious leaders. Many victims said that the first people to spread the scheme were pastors within Brazilian and Spanish-speaking churches. From there, it radiated out to families until nearly everyone had been pressured to invest and reap “the good life.”
Vega said they will continue to work with those who have been victims of TelexFree and urged anyone who has not filed a complaint to contact the Collaborative on Broadway, Chelsea.