Secretary of State William F. Galvin’s office is investigating the Andover operation of Emgoldex Team USA Inc., a company that recruits investors to buy gold online and pays bonuses for referring friends and acquaintances.
The state Securities Division “has an open investigation and is actively looking at the issuer and individuals associated with it,’’ said Brian McNiff, a spokesman for Galvin. He declined to provide details of the probe.
The inquiry comes four months after regulators filed civil fraud charges against TelexFree Inc., alleging that the Marlborough Internet phone service company was running a $1 billion global pyramid scheme. Galvin is also investigating Wings Network, a Portuguese company that was operating locally and also based its business on so-called multilevel marketing.
Advertisement
TelexFree’s two US owners have also been charged with criminal fraud, and the company is under investigation in Brazil. The owners, James Merrill and Carlos Wanzeler, have denied wrongdoing.
Emgoldex is under investigation in Colombia and Panama for allegedly running a pyramid scheme, according to news reports.
Emgoldex filed incorporation papers in Massachusetts in June, calling itself a training center. But online links and Facebook pages describe a business paying individuals large returns for buying gold and signing up others to participate. Online literature promises a payout of $8,000 to people who spend $800 on gold with the company.
No one answered the phone at the company’s Andover office this week and two of the cofounders did not return messages left on their voice mail Thursday.
According to Emgoldex websites, the company is based in Dubai and has a presence in the Seychelles and Amsterdam. It says it is the marketing arm of a Munich company called Gold and Silver Physical Metals, a trader of precious metals that was founded in 2008.
The Emgoldex website touts gold as the “metal of gods and kings!” and a YouTube video describes gold as a product that “sells itself.’’
The company’s website displays numerous awkward English translations, including one describing the enterprise as the “child company” of the German parent. Emgoldex says it has more than 300,000 customers globally.
Advertisement
One American investor, who spoke on condition of anonymity because he was not authorized to speak for the company, said he and others had already earned profits from Emgoldex. He said the company is trying to gain a foothold in the United States. The man said he does not believe Emgoldex is a pyramid scheme, making money mainly by bringing in new investors.
Online ads for the company promise easy work from home: “Could your business use an extra $4,000, $8,000 or $12,000 every six weeks?”
Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.