BREAKING NEWS: TelexFree being investigated as financial fraud by Dominican Republic

Dominican News "Listin Diario" report that Dominican Republic's Securities Division has launched an investigation against TelexFree as a money laundering fraud

http://translate.google.com/translate?hl=en&sl=es&tl=en&u=http%3A%2F%2Fwww.listindiario.com.do%2Fla-republica%2F2014%2F4%2F15%2F318457%2FFiscalia-abre-investigacion-sobre-empresa-Telexfree-acusada-de-lavado-de

BREAKING NEWS: Uganda called TelexFree "unregulated and unlicensed financial scheme"

Bank of Uganda at a conference named TelexFree and some fraudulent Forex operators as "unregulated and unlicensed financial schemes" that prey upon the poor and the uneducated.

http://pctechmag.com/2014/04/telexfree-not-regulated-by-government-says-bank-of-uganda/

BREAKING NEWS: Massachusetts formally charged TelexFree with being a 1 BILLION dollar fraud (UPDATED)

It's now official: US Government has acted on TelexFree, a long suspected fraud. Commonwealth (state) of Massachusetts, home of TelexFree, has charged TelexFree of being a 1.2 billion dollar fraud (90 million in Massachusetts alone), and also stated that the company is declaring a bankruptcy to PREVENT the authorities from securing victim's money.

“They clearly are responding to the fact that an investigation was underway,’’ Galvin said in an interview. “Now the thing is to act promptly and get whatever we can for these people.’’

http://www.bostonglobe.com/business/2014/04/15/secretary-galvin-charges-marlborough-phone-service-company-with-million-fraud/RSaSTWvJpnOjo8Ryh8stpN/story.html

Jordon "Ponzitracker" Maglich has covered this in Forbes:

http://www.forbes.com/sites/jordanmaglich/2014/04/15/massachusetts-regulators-allege-telexfree-is-1-billion-ponzi-scheme/

Expect Massachusetts lawyers filing complaint with Nevada to stop the bankruptcy filing at once, and a more formal cease, desist, and account freeze put in its place instead.

Stay tuned, folks. This will get ugly FAST. Expect the Feds to jump in any second.

P.S. News has already reached Brazil

http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Feconomia.ig.com.br%2F2014-04-15%2Ftelexfree-e-piramide-diz-autoridade-dos-eua.html

Editor's note: Updated with the correct figure, previously the newspaper quoted only 90 million.

BREAKING NEWS: TelexFree Declares Bankruptcy, then was REJECTED

Bankrupt (Photo credit: LendingMemo)

Yes, you heard right: TelexFree (US) tried to declare Chapter 11 bankruptcy and reorganization.

Then was rejected for filing an incomplete application.

On Sunday, 13-APR-2014, Press Release started appearing all of the US through PRNewsWire, which linked to this document :

http://www.kccllc.net/telexfree/document/1412524140413000000000001

Appears to be official, and contains a list of creditors owned money to.

According to some comments, (unverified) the top creditors to the bankrupt TelexFree are Carlos Costa's wife and nephew (1.34 mil and 0.96 mil USD respectively). Carlos Costas is head of TelexFree in Brazil.

Document only lists the top 30 creditors, there are obviously much much more.

BREAKING NEWS: Department of Justice and Federal Bureau of Investigations (DOJ and FBI) are investigating Herbalife

According to an Federal official, and reported by multiple sources such as Financial Times and Los Angeles Times, FBI and DOJ had opened a criminal investigation into Herbalife several MONTHS ago, before FTC announced their own investigation.

With SEC and FTC also investigating the company, this may be bad news for Herbalife.

See LA Times Link: http://www.latimes.com/business/la-fi-herbalife-fbi-20140412,0,5064592.story

Who Really Decides What Is Safe In your Food (and Nutritional Supplements)?

English: Logo of the . (Photo credit: Wikipedia)

Obvious fact:  nutritional supplements are considered "food" by the Food and Drug Administration (FDA).

Not so obvious fact: what ends up in the nutritional supplements are often UNregulated
by the FDA, because companies can simply declare some ingredient to be "generally regarded as safe" (GRAS) based on some internal studies, and include them without telling the FDA.

Some ingredients are submitted to FDA with full studies and gains full FDA approval, but most ingredients are not approved by the FDA, and are merely declared to be GRAS by internal studies. A third way, where the GRAS study was submitted to FDA for approval, are often withdrawn, and the ingredient used any way.

GRAS was meant to be used for common ingredients like vegetable oil, vinegar, and so on. But the law, enjoying its 56th birthday recently, is now an anachronism and a loophole for companies to punch through ingredients without formal review by the FDA.

National Resource Defense Council has published a paper where it tracked 56 companies involved in 250+ chemicals declared as GRAS, as reported by Consumerist. Some of which are... troubling. And you need to be aware if you are drinking or taking any weight-loss or energy formulas.

Scam Psychology: Don't be a GIMP (Good Inexperienced Money People)

Carl Sagan, famous scientist, who said
"extraordinary claims require extraordinary proof"
 (Photo credit: Wikipedia)

There are many types of people looking for additional income, and vast majority of them are GIMPs i.e. "good inexperienced money people" (my thanks to M_Norway on BehindMLM for introducing the term). There really is no formal definition for a GIMP, but its closest synonym is "money sheeple", i.e. people who are just not savvy with money and scams, and thus, invested in scams and shady businesses with their hard earned money.

GIMPs are typically people who know little about network marketing, internet, and scamworld in general. They don't understand that anybody can make a website in hours, and meeting rooms can be booked and sleek presentations can be done for minimal costs nowadays. Even income claims can be faked or exaggerated. Claims are worthless without a basis for comparison, and to quote the great scientist Carl Sagan, "extraordinary claims require extraordinary proof", most of which is not forthcoming.

Part of the problem stems from our daily use of money, which leads us (through self-serving bias / optimism bias) to believe that we are far more savvy with decisions about money than we really are.