The murky world of multi-level marketing

There is something of the televangelist about Rogério Alves da Silva. The 22-year-old Brazilian likes to pepper his inspirational speeches aimed at recruiting new members to WishClub, a multi-level marketing (MLM) program that claims to operate in 52 countries, with religious and Biblical references: “I call on God to protect me. I have a great mission to carry out,” he told an audience of 700 at a Madrid hotel in June. After paying anything between €225 and €1,125 to join WishClub, members would supposedly be paid for watching online advertising and be required to find new recruits.

Last year, the authorities in the Brazilian state of Minas Gerais shut down an MLM program run by Alves called BlackDever, which promised members earnings of up to €63,000 a month, describing it as a pyramid scheme. It said that BlackDever required a constant supply of new members, all of whom had to pay to join, and that the business model was not sustainable. Alves and three other men running the program were accused of abusive practices and of using misleading advertising.

Last year, authorities in Brazil shut down an MLM program run by Alves called BlackDever

Set up with capital of €33,000, BlackDever eventually turned over €24 million, according to the Brazilian authorities. “Rogério Alves’ business smelt bad. The accounts consisted solely of deposits. It wasn’t a bank, and it didn’t sell anything,” says Fernando Rodrigues, a public prosecutor in Minas Gerais, who questioned Alves, who turned up at court with eight lawyers. “When we called him in for a second interrogation, he was already in Spain,” Rodrigues explains.

In December 2013, a Spanish franchise of WishClub was set up in Santa Cruz de Tenerife, in the Canary Islands, by Ezequiel Hipólito, Alves’ half-brother. Although his name does not appear on any documents relating to WishClub, Alves tells audiences at his recruitment drives in Spain that he is the founder of WishClub Spain, claiming to have attracted 200,000 investors in two months, making the company “among the 300 most important in Spain.”

Alves says he has attracted 200,000 investors making the company “among the 300 most important in Spain”

Alves runs his WishClub operations from a network of offices in Alcobendas, where he spends his afternoons training new recruits on his schemes, according to an employee who would rather remain anonymous. Alves and his staff have refused to talk to EL PAÍS.

It now appears that a number of Spaniards have joined forces with Alves. Juan Carlos Molina is one of the founders of TelexFree, a pyramid scheme that was shut down by the FBI in April. On its website, the Securities and Exchange Commission says that it is accusing multiple companies under the TelexFree umbrella of orchestrating a massive pyramid scheme that targeted Dominican and Brazilian immigrants and took in at least several hundred million dollars from investors worldwide. TelexFree's Brazilian operations were regarded as one of the largest financial frauds in Brazil's history, involving at least a million people.

TelexFree's Brazilian operations were regarded as one of the largest financial frauds in Brazil's history

Molina was present at a WishClub meeting in June, where he was handed a check for €33,000 by Alves. Others involved in TelexFree now working with Alves are José G. and Silvia P, along with Roberto Z, who says on his LinkedIn page that he is the co-founder of TelexFree.

WishClub insists that it is not a pyramid scheme, saying that the group has just 12,000 distributors in Spain, Portugal, Brazil, the Dominican Republic and Colombia, and not the 200,000 that Alves claims at recruitment drives. “He gets carried away, he’s very young,” says a company spokesman, adding that Alves has no charges pending against him, and that he is considering bringing legal proceedings against the Brazilian government for the closure of BlackDever.