Last week, both state and federal regulators alleged that TelexFree, Inc. and related entities were a massive Ponzi and pyramid scheme that may have raised hundreds of millions of dollars from victims worldwide. In addition to the financial carnage inflicted on these victims, many of whom invested significant sums, one recent report claims that at least six people have committed suicide in the wake of the scheme’s collapse. According to Dominican Today, one well-known TelexFree promoter has claimed that at least six recent suicides in the town of El Seibo, Dominican Republic, are attributable to TelexFree.
Maria Cordones, originally from the Dominican Republic but currently residing in New York, indicated that she had recruited at least 40 people to invest in TelexFree, which promised exorbitant returns in exchange for several minutes of work daily that purportedly entailed approving computer advertisements. For example, an investment of $1,375 resulted in a weekly payout of $100 – an annual return of over 200%. Authorities have estimated that TelexFree raised at least $300 million from United States investors alone.
One reason for TelexFree’s popularity was its practice of incentivizing investors to recruit new investors to the scheme. This incentive-based system rapidly expanded the scheme’s reach, and the promised returns were especially well-received in poorer countries such as the Dominican Republic and Brazil. According to Cordones, the 40 people she recruited in the Dominican Republic – where the average annual wages pales in comparison to larger countries – collectively lost thousands of dollars.
A morbid topic that is not often discussed, suicides attributable to Ponzi schemes do occur. In one particularly grim example, at least ten suicides were linked to the collapse of of a massive Indian Ponzi scheme last year. Given that the suicides linked to TelexFree are isolated to one town in Dominican Republic, the possibility certainly exists that this number could increase.