Business

Wings Network charged with running pyramid scheme

The civil fraud charge comes days after Wings Network had voluntarily offered to suspend US operations.
Beth Healy/Globe Staff
The civil fraud charge comes days after Wings Network had voluntarily offered to suspend US operations.

Secretary of State William F. Galvin on Thursday charged Wings Network and three Central Massachusetts individuals with fraud in a multi-level marketing scheme that targets Spanish and Portuguese-speaking communities.

The civil fraud charge comes a day after the company voluntarily suspended US operations, and as Galvin and federal authorities pursue a different company, TelexFree Inc. of Marlborough, for allegedly running a similar type of operation, only much larger.

Wings, which is based in Portugal, purportedly sells Internet cloud storage plans, but has been selling securities without a license, according to Galvin’s administrative complaint. Within five months, Wings Network collected more than $12.5 million from 8,914 Massachusetts investors, the complaint says. The alleged pyramid scheme emerged in Massachusetts late last year, the state said.

Advertisement

A lawyer for Wings Network was not immediately available for comment.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

The complaint centers on a pair of promoters in the Boston area. It also names a number of related business entities.

“This case is another example of unscrupulous operators preying on vulnerable immigrant communities with promises of great riches, in this instance a bogus means of downloading electronic content,” Galvin said. “In reality, these operators only sought to rope more participants into their scheme.”

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.