Rwandan investors in the TelexFree pyramid scheme, collectively losing an estimated $65 million, now plan legal action. This follows their government's refusal to help recover the funds.
Affiliates yesterday formally asked the Rwandan government to intervene and recover 44 billion RWF. Emmanuel Hategeka, Permanent Secretary in the Ministry of Trade and Industry, stated TelexFree holds no assets within Rwanda's borders.
"If the company had assets in the country it would be easy for us to seize the assets and compensate the members," Hategeka said. "What we can do is only to look into the contractual framework between the company and members and advise accordingly."
The government's stance pushes Rwandan affiliates toward the courts. James Gihana, an investor who lost money, confirmed he and others are securing local and foreign lawyers for legal action. "We want our money back. Our local and foreign lawyers will advise us accordingly," Gihana told The New Times.
TelexFree extracted funds from several developing nations, directing them to US and Brazilian-based leaders. Rwandan authorities tracked at least $10.2 million leaving the country via TelexFree bank accounts in Germany and the US. Rwanda banned the operation in 2013. The government accused TelexFree of money laundering, tax evasion, and exploiting its citizens for foreign profit.
The scheme's filing for US bankruptcy protection complicates recovery efforts. US Bankruptcy Code rules prohibit creditors from pursuing certain debt actions once proceedings begin. This creates a legal shield for the company.
Commercial lawyer Jean Nepomuscene Mugengangabo suggested several paths. Rwandan investors could sue through the US embassy, travel to the United States to file a petition directly, or sue in Rwanda and transfer the case to US courts. "It is possible to get back their money as long as they are sure about the mother company in US," Mugengangabo stated.
TelexFree operated across dozens of countries beyond the US and Brazil. Victims in none of these locations found assets or money to recover. Rwandan investors now face the same challenge: pursuing a bankrupt company with no local assets and no funds to claim.