US regulatory and law-enforcement authorities are engaged in discussions about how to stop the worldwide spread of Internet pyramid schemes, following criminal indictments in Massachusetts against the owners of TelexFree Inc., who allegedly conducted a $1 billion global fraud.
The talks involve creating a coalition of federal and state securities regulators, as well as law-enforcement agencies, who would in turn reach out to their counterparts abroad, according to two US officials with knowledge of the effort. The Department of Justice is among the parties participating in the process.
The discussions reflect a growing realization by regulators in the United States and overseas that greater collaboration is needed to fight a new breed of online financial scams that move seamlessly across borders and ensnare victims with unprecedented speed.
“They are beginning to multiply exponentially,’’ said Luis Guillermo Velez, superintendent of companies in Colombia, in a recent interview. In the past year, Velez said, he has shut down three large pyramid schemes in his country, including TelexFree and Emgoldex, outfits that also have thrived in the United States.
“It’s so difficult to identify the people responsible and to really capture them, that at some point there needs to be an international agreement on how to handle this situation,’’ he said.
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