- Associated Press - Friday, April 18, 2014

BOSTON (AP) - Massachusetts authorities are trying to get money back for investors of Telexfree, a company accused of operating a pyramid scheme to bilk Brazilian immigrants in the Boston area.

Mark Berthiaume, an attorney for Telexfree, did not respond to phone messages left by The Associated Press, and his office in Marlborough is still closed after federal agents searched it on Tuesday and carried away company documents.

The Massachusetts State Department said Wednesday that it had notified judges in Nevada, where the company had filed for bankruptcy, of their civil suit against Telexfree, which promoted itself as a telecommunications company with offices in Marlborough, Mass., and Brazil.

The action seeks to get money back for Telexfree investors. Just in Massachusetts, the company made $90 million, plus millions more overseas, officials said.

Brian McNiff, spokesman of Massachusetts Secretary of State William Galvin, said the courts in Nevada have been informed of the case that the judge would take that into account when he decides on the issue.

Galvin has accused Telexfree of operating a pyramid scheme, as it did not sell any actual product and promised exorbitant profits in exchange for posting ads on the Internet. In order to gain from their investments, clients were asked to pay between $289 and $1,375. Officials say the company paid them with the money brought in by the new investors.

The next court date between Telexfree and its creditors has been scheduled for May 22 in Nevada.

When it filed for bankruptcy, Telexfree said it had assets of between $50 million and $100 million. The news of its bankruptcy spread fast and provoked panic among investors.

Many of the investors were Brazilian immigrants in the Boston area, but the company had offices or representatives in other Latin American countries and even in Africa. Complaints about the company have surfaced on social media sites from places including the Dominican Republic, Peru, Ecuador and Uganda.

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