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TelexFree, a trade name owned by Telexfree Inc., was a multibillion-dollar Ponzi scheme disguised as an internet phone service company. Prosecutors have described it as the largest fraud of all time in terms of the number of people affected – more than 1 million, with victims in various countries.
Thousands of fraud victims of the TelexFree worldwide multibillion-dollar Ponzi scheme have started to receive partial repayment. U.S. Bankruptcy Judge Melvin S. Hoffman approved the plan filed by Stephen Darr, the Chapter 11 trustee, to distribute more than $150 million to over 100,000 victims of the scheme. If you were a victim of fraud by TelexFree, you can check your claim status by clicking the button below.
A pyramid scheme and a Ponzi scheme are fraudulent investment schemes that rely on recruiting new participants.
In a pyramid scheme, people invest money with the promise of high returns and earn money from the fees paid by those they recruit. As more participants are recruited, the structure takes the shape of a pyramid. Eventually, when new recruits become scarce, the scheme collapses, causing most participants to lose money.
In a Ponzi scheme, investors are promised high returns and receive profits from money contributed by new investors rather than legitimate investments. When new investors dwindle, the scheme falls apart, resulting in significant losses for the majority of participants.
Both pyramid schemes and Ponzi schemes are illegal and should be approached with caution.