The Massachusetts Securities Division confirmed its investigation into TelexFree, a Marlborough-based telephone marketing company, linking the probe to a previous cease and desist order against the WCM777 Ponzi scheme. Brazilian Public Prosecutor Alessandra Marques first announced a US investigation in January, though TelexFree denied its existence at the time.
Independent media outlets have since confirmed the US regulatory investigation. The Milford Daily News reported that Secretary of State William Galvin's office initiated the inquiry. This probe stemmed from the office's prior investigation into a similar company accused of targeting Brazilian immigrants in Massachusetts with a multi-marketing scam, according to Brian McNiff, a spokesman for Galvin.
Galvin's office noted the TelexFree model mirrors a system used by WCM777. WCM777, now known as Kingdom777 and Global Unity, offered affiliates returns on investment ranging from $400 to $3200 for packages up to $1999. The scheme has faced cease and desist orders in both Massachusetts and California.
The current status of Global Unity's website remains unknown. Unconfirmed reports suggest WCM777 co-founder Tiger Liu fled the United States with $50 million after state regulators issued the cease and desist orders.
Brazilian media outlet iG also confirmed the US investigation into TelexFree. Reporter Vitor Sorano stated the company's Massachusetts headquarters is under scrutiny by the local government, which considers the state the central point of operation.
The Office of the Secretary of State, William F. Galvin, conducts the American investigation. This office holds the authority to suspend TelexFree's business activities within Massachusetts. Investigations have been underway since at least March 2013, though they were kept private.
McNiff confirmed the investigation but would not comment on its start date or whether company representatives would be questioned. "We have a policy of not commenting on ongoing cases," he said. McNiff added that any action taken in Massachusetts would be communicated to other state and federal jurisdictions.
iG's report mentioned "someone from the company being heard," which refers to the issuing of subpoenas to individuals connected with TelexFree.