An injunction in Brazil, which halted TelexFree's weekly ROI payouts and affiliate recruitment, shifted the company's promotional efforts to neighboring countries. One such region was Peru, a nation of thirty million people that shares a border with Brazil's western state of Acre. Acre itself faced a Public Prosecutors' investigation into TelexFree for potential criminal charges of money laundering and embezzlement.
The Acre injunction severely crippled TelexFree's operations across Brazil. Before the shutdown, TelexFree reportedly had about 70,000 affiliates in Acre. After the legal action, much of the scheme's marketing momentum moved into Peru.
As TelexFree spread in Peru, local media began to report on it. Peru21, a national newspaper, launched its own investigation into the promotional activities of local affiliates.
Peru21 reporters responded to an advertisement for a "tempting job offer" and visited a TelexFree affiliate office in Lima, the capital. Wilmer Garcia met them there and presented the TelexFree MLM opportunity.
Garcia explained a method to earn money with TelexFree through digital advertising. This involved promoting software for low-cost internet phone calls, referred to as a VOIP scheme. An individual could invest $339 or $1,425 to participate.
The investment allowed a person to promote the product either once or five times daily for a year. A contract recorded these terms, promising earnings up to $100 weekly. Participants could earn more by recruiting others. Each new person brought in yielded a $20 commission, with an additional $20 paid if that recruit brought in another.
The core of the TelexFree model involved affiliates investing in "AdCentral" positions. A $339 investment bought one position, while $1,425 secured five, known as an "AdCentral Family." Investing affiliates received $20 weekly per position, provided they posted daily to promote the scheme online. These positions were often called "contracts" and expired after 52 weeks. Affiliates then had the option to renew their contract for another year of weekly earnings.
Newly invested money from affiliates paid out existing affiliates each week. The company maintained a pretense of selling VOIP services to retail customers who largely did not exist. Wilmer Garcia claimed he had earned $8,000 USD through his involvement with TelexFree.
