Tales Of Modern Fraud – Telex Free

One of the most tempting offers in the world of investing is the prospect of obtaining high returns with minimal risk. Unfortunately promises of this kind of nearly impossible combination are usually scams. "Telex Free" is a recent version of this fraud.

After being run out of Brazil after duping hundreds of thousands of people out of hundreds of millions of dollars (equivalent), the fraud moved on to the Dominican Republic, a country where many people have relatives in the U.S.

The inevitable implosion of the scam has now left tens of thousands searching for answers once again.

See also: 3 Of The Most Popular Investment Scams And How To Avoid Them

Telex Free makes a simple promise: invest the equivalent of $1,600 (approximately) and you will receive approximately $100 per week, every week for a year.

In order to get people to believe that such incredible returns are possible, the company makes an example of a few select early “investors”. These early adopters almost immediately begin to receive their weekly $100 payments into an account that the company opens for them. They then excitedly spread the word of their good fortune, causing a virtual frenzy as people look for any way possible to get their hands on the requisite entrance investment.

Of course, for the first 16 weeks the company can simply repay the investor with the same money that the investor put in. It is only after the 16^th payment that a profit is made by the investor. But, because Telex Free has no product or service to sale, the scam must attract new investors in order to continue to pay previous investors.

This is a textbook Ponzi scheme. And, much like the original scheme, the Telex Free scheme quickly attracts new money as a result of the supposed profits of each successive generation of investment. Many of the early adopters could potentially make a profit from the scam, but greed often causes even these lucky ones to lose it all.

Those who first enter the scam are paid as agreed, but often reinvest their “earnings”, along with additional funds, in an attempt to maximize profits. As word spreads people take loans, including mortgages, and invest up to tens of thousands of dollars in the scheme – all looking to make a quick and painless buck.