Rwanda's Ministry of Trade and Industry has confirmed an investigation into TelexFree, with Emmanuel Bayingana overseeing competition within the ministry. The assessment of the company's AdCentral investment scheme is expected to conclude next week. The ministry, along with the Rwanda Development Board and the central bank, will decide on further action if the business appears risky.
Steve Labriola, TelexFree's International Marketing Director, has traveled to the Dominican Republic, Haiti, and Spain. His efforts aim to attract new affiliate investors for a scheme now under scrutiny on multiple continents.
The investigation focuses on TelexFree's AdCentral investment model. New members invest over $1,570. They are told they can earn $100 weekly by posting three advertisement links. Recruiters also earn additional bonuses.
This structure resembles a classic Ponzi scheme, disguised with internet terminology. Participants buy an "AdCentral Family" position, which contains five regular positions. This promises a $100 weekly return, or $20 per position.
TelexFree already faces scrutiny in the US, South America, and Europe. Africa now adds to the growing list of jurisdictions monitoring the company.
In Kigali's Remera suburb, TelexFree maintains an office in a new complex near a taxi park, sharing space with Bank of Kigali. A staff member named Hakim pitches the opportunity to prospects. He tells them, "It's a profitable business. You can join and make $100 a week. I make the same every week by just posting three links."
A man identified as Mr. Ndoli supports these claims. He states he joined two months ago and earns $100 weekly. Ndoli says posting links on a computer or phone takes five minutes. He expects to recover his $1,570 investment and then earn profits.
When asked about claims of others being scammed, Ndoli blames the victims. He insists, "They failed to post links. You make money by posting links. If you don't post links, you don't make money."
But links alone do not generate revenue. The scheme relies on new investments from new participants. Someone must buy in, and others must recruit more people. Eventually, the number of new recruits falls short, and payouts cease.
TelexFree's leadership will likely not worry about Rwanda's investigation immediately. The company plans a party in Madrid this week, even as regulators prepare to rule on the operation's legality. Rwanda's government expects to have its answer next week. The company has operated openly for months across several countries, collecting money from individuals betting on a financially unsound promise. Calling it "posting links" does not change its nature.