TelexFree laundered funds through shell companies
Where there’s smoke, there’s fire.
The connection between money-laundering and TelexFree has been a long-standing one.
A lot of the time Ponzi schemes launder stolen funds through offshore jurisdictions, that’s par for course. But with TelexFree, it always felt a bit more organised – cartel’esque even.
We first learned of the links above and beyond what you’d normally expect to find in a Ponzi scheme, when back in June 2013 Brazilian police announced they’d
opened an inquiry into whether the management of Telexfree committed crimes against the economy and money laundering.
That was a very specific inquiry that appeared to above and beyond that of TelexFree being an obvious Ponzi scheme.
That same month TelexFree was effectively shut down in Brazil, by way of a crippling injunction granted in the state of Acre. As Acre’s money laundering investigation continued, specific details as to what they’d found remained elusive.
In the interim, the Rwandan government would announce they’d found money laundering links to local cartels. And once TelexFree was shut down in the US, i-Payout then hinted at the scheme’s money laundering ties.
That TelexFree was being investigated for money laundering was frequently mentioned, but we never really knew just what investigators in Acre were up to, or what they’d thus far found.
The recent filing of a police report in Espirito Santo now changes that, with light being shed on the inner-workings of TelexFree’s Brazilian money laundering operations.
The main mechanism TelexFree laundering stolen investor funds in Brazil was through shell companies. These companies were registered in the names of family members of TelexFree management along with certain individuals belonging to a trusted inner-circle.
Note: In Brazil, the term “orange” is used to describe people or companies that are used as shills.
There is evidence that directors of (these) companies (are) likely (to be) oranges (and) are (recruited) affiliate leaders (investors (in) Telexfree), (these companies) squandered millions (through) the internet.
The (individuals) are identified as important to the formation of the (TelexFree) pyramid (scheme) and illegal activity (via) the sale of mobililários values without authorization from the federal government.
Initially, (the) investigation target(ed) a Telexfree group of five companies and eight people, as members of the company Carlos Wanzeler and Carlos Costa, (and related) entrepreneurs.
However, (with) the new (evidence that will be presented) at the end of the criminal investigation, the number of people and companies indicted for participating in the alleged scheme of fraud (will rise).
The recent evidence collected was part of “Operation Orion“, which saw Brazilian feds conduct raids on TelexFree offices and related properties back in July.
Pursuant to search warrants (issued) and (evidence) seized during Operation Orion, agents found documents such as social contracts, invoices and statements (relating to) Telexfree’s banking-related businesses.
These businesses have headquarters in various cities (in) the state (of Espirito Santo) and were hitherto unknown to the police.
Further details will be forthcoming, with the criminal investigation required to be ‘finalized in mid-November‘.
In the meantime,
the names and the number of companies (acting as) oranges and (co-conspirators) of probable fraud can not be revealed (so as) not to disrupt the progress of the investigation.
That said, police have revealed that
(in order to investigate) how these companies may have been used for money laundering and concealment of assets (by) members of Telexfree, Judge Ayton Junior Bonomo, (of) the 1st Federal Criminal Court of Victoria has decreed (that the) financial assets and any attempts at bankruptcy proceedings of at least two companies be blocked.
And some details regarding a few of the companies have been made public. Not suprisingly, Carlos Costa’s family appear to be neck-deep in TelexFree’s money laundering operations:
Two companies, registered in the name Leticia Costa, the daughter of partner and director of Telexfree, Carlos Costa, are among those suspected of acting erratically to cover up fraudulent financial transactions.
These companies are very different branches of Telexfree that claim to engage with multilevel marketing and the sale of VoIP. One is Agrofruta of Brazil Foods, a corporation (S/A), headquartered in Jaguaré in northeastern Espirito Santo, a candy production sector.
A police report filed in court points out that the company has suspect banking operations, benefiting “companies related to investigated and related persons.”
According to investigations, the wife of Carlos Costa, Jozélia Sangali, is part the supervisory board of the S/A along with other members identified by police as affiliates of Telexfree.
When TelexFree attempted to escape Ponzi liability by filing for bankruptcy in the US, Costa’s wife (right with husband Carlos) was named as the top affiliate creditor.
The company had hoped, through bankruptcy, to settle $1.2 million USD in outstanding ROI payouts owed to Costa’s wife.
Carlos Costa’s daughter, Letícia Costa, is also implicated through various investments made in her name:
Minutes of a meeting of the company also revealed that twins Flávio and Fabio Arraz, led a TelexFree related construction company network.
Integrated (into this network was) employees of Agrofruta and office interns working at the legal firm Costa & Fuchs, who defended TelexFree from financial pyramid scheme accusations.
Agrofruta was formed in early 2014 with a capital of £10 million. Leticia Costa, the daughter of Carlos Costa, initially invested £200,000, despite (already) being the owner of R $4.9 million in stock.
The other partner in the firm, João Armando Caixeiro de Assis initially did not have any kind of application, despite having £ 5.1 million in shares.
Another company suspected of being related to Telexfree is “Brazil Factoring”, whose office address is the same as that of Coast & Fuchs. According to police however, there is no reference to Brazil Factoring on the Coast & Fuchs website.
Brazil Factoring, which has capital of £300 000, is involved in alleged payments made by Ympactus (TelexFree’s Brazilian arm).
Leticia Costa (daughter) and Jozelia Sangali (wife) joined the company on 25 November (2013). By February (2014) the company only belonged to Leticia.
Police say that despite being a partner of the companies in 2012, Leticia had declared an available income of just £60 000, despite having been paid millions of dollars in capital by the two businesses.
Whether or not these revelations will have any impact on Carlos Costa’s fledgling political career remain to be seen. Co-inciding with the release of the police report, Costa suffered a heart attack earlier this week.
Flávio Arraz, one of the men behind the construction company network implicated in TelexFree’s money laundering operations, is currently managing Carlos Costa’s political campaign.
Whether or not any TelexFree Ponzi funds have been used to bankroll Costa’s bid for a seat in congress remains unclear.
Approached for comment regarding his family’s direct involvement with TelexFree’s money laundering operations, TelexFree’s lawyers
downplayed the fact that relatives of Carlos Costa and promoters of the company are listed in the body corporate of two of the companies under investigation.
(The lawyers) also denied that Agrofruta and Brazil Factoring are orange companies used to launder money by Telexfree.
When questioned specifically about the Brazil Factoring company having the same registered corporate address as TelexFree’s attorneys Coast & Fuchs (who perhaps not so co-incidentally also represent the other company, Agrofruta), attorney Antonio Carlos de Almeida Castro replied,
Our client is indeed the company you mention and has nothing secretive in this situation. I can not give more details. I was not subpoenaed.
Right. Obviously nothing secretive going on there then.
One particular interesting aspect of the yet-to-be-released report will no doubt be the cataloguing of TelexFree’s apparent subjugation of their assets despite a nationwide injunction being in place.
The businesses involved in the scandal may have received resources, as indicated by research, after TelexFree accounts were frozen, as per the June 2013 Acre injunction.
What that will ultimately mean for Carlos Wanzeler, Carlos Costa and others involved should be a corker to watch play out. If for anything other than the constant denials and assertions of legitimacy Costa has repeatedly on his TelexFree YouTube channel.
Looking forward the report also touches on the continued co-operation between US and Brazilian regulators, as both work to put together the finishing touches on their respective cases against TelexFree.
(The) global nature of TelexFree’s financial fraud has resulted in the Brazilian and American governments coming to an agreement on the sharing of (collected) evidence.
(The) exchange of information began last week with the journey of two (PF) agents and a delegate from the Federal Police to Boston.
Evidence collected by the PF will possibly be used by prosecutors in the US to bolster the case involving the criminal actions of TelexFree and its owners, the Brazilian Carlos Wanzeler and the American James Merrill.
On the Brazilian side, there’s also a larger focus on the financial shenanigans used by TelexFree investors to continue to recruit despite the Acre injunction:
Brazilian agents will focus mainly on the evidence raised by the investigations in the United States showing the financial transactions originating from Brazil.
According to Rodrigo De Lucca of the Federal Police, the objective is to ascertain the number of TelexFree affiliates residing in Brazil who were registered,after the blocking injunction was granted in Acre .
Such people, according to lawyer Alexandre Fiorotti, will have increased difficulty recovering amounts invested over affiliates who have contracts directly with Telexfree in Brazil. “Repatriating this money is not something simple.”
Those who continued to invest in TelexFree in Brazil despite the injunction will likely be waiting years before they realise any payouts. The criminal case against the company and it’s owners must play in full before any seized funds can be distributed out to Brazilian net-losers.
they have to find out who financed the early Telexfree. this is what intrigues me most.
Someone has to fund the first payment. they had no money. some were broken. Who funds the beginning of the pyramids?
Presumably their money was “pocketed” by uplines or sent via payment processors to other countries…such as the US where Telexfree is in bankruptcy and being sued by predators
As the man said, “Repatriating this money is not something simple.”
If they pull through with the forensic side of it, I think they’ll go after those at the top who were pushing it (yoohoo, Sann Rodrigues!).
They just need to be able to put together the flow of money into accounts held by these people. The money had to leave Brazil so they can at the very least trace it up until that point.
Get a court to order the affiliate return what they received off the books and hit them with criminal/civil charges if they fail to comply. They’re in Brazil only (not sure where Rodriguez is currently hiding out with his latest schemes), so tracking them down shouldn’t be too difficult.
@Joao
Wanzeler, Costa and Merrill through their cleaning business and Diskavontade was it not?
Sann Rodriguez is your apex affiliate, with family member stooges taking up the other top investor spots.
no Oz. they have to find out who financed the early Telexfree. this is what intrigues me most. Someone has to fund the first payment. they had no money. some were broken. Who funds the beginning of the pyramids?
Is there an echo in here?
Peruvian victims sues TelexFree and Wings.
http://www.pachamamaradio.org/05-09-2014/formalizaran-denuncias-contra-representantes-de-las-empresas-fachada-telexfree-y-wings.html
Oz, do you like to know more about this fruit bussiness? I really research about it and found everything about what is public in net.
This agrofuita is really a good bussiness with a long and normal history. There is no thing wrong about it UNTIL they involve with telexfree.
What I see is:
(Carlos Costa) – Hey, I need spend this money in something. Because the acre justice ALREADY block my money and this new money coming from USA will not be good in my hand.
So, for some reason, he seen this company and say:
(Carlos Costa) – Hey, this company is good. If I give you x million, you will sell it for me? You will continue doing everything normal, but the company is mine.
(Ower) – But, why do you want this? We don’t have any absurd profit. We are just a family and local company with more (i don’t know) 20 years of history. Our profit is small, but constant.
(Carlos Costa) – Well, when all this telexfree things ends, I will need something to do. And if I have this stable and long running company, no one will care.
So, this IS the site of the company (I really check it): agrofruta.com.br
This is some google search Agrofruta Indústria e Comércio Ltda em Serra: http://www.misterwhat.com.br/company/99271-agrofruta-industria-e-comercio-ltda-serra“>Agrofruta Indústria e Comércio Ltda em Serra
There are a lot of people you can find about this company. Why not about the director? http://www.linkedin.com/profile/view?id=234873340&authType=OUT_OF_NETWORK&authToken=vnJR&locale=pt_BR&srchid=303721851410028664915&srchindex=1&srchtotal=1&trk=vsrp_people_res_name_headless&trkInfo=VSRPsearchId%3A303721851410028664915%2CVSRPtargetId%3A234873340%2CVSRPcmpt%3Aprimary. There are a lot of small people you can find.
And, this is more interesting. You can see more about the history of the company. But need to pay to see it. No one want to donate and make a print screen for everyone? Look here: infoplex.com.br/perfil/09166536000156
With the CNPJ you can google about ordinary things of this company.
Or what about work duty and things like it.
The ironic thing is: Why about fruit? Do they have humor sense? They will buy a company that can sell orange to be their orange company?
ps: your spam filter sux 😀
Thanks for the additional information Bruna.
Spam filter means I don’t have to sift through tons of automated spam every day in case there’s a legit comment hidden there.
Disabling URLs will usually work if it’s complaining about too many links.
I’m unfamiliar with this Brazilian company and precisely what “factoring” means there. In the United States, it means that accounts receivable (invoices) are sold at a discount to create cash flow.
“Factoring” can be performed legitimately in arm’s length deals that serve the interests of the parties. But, in some circumstances, it can be a minefield.
A lack of arm’s length could signal fraud. Circuitousness could signal money-laundering.
A presence of a “factoring” company is not unusual in U.S. Ponzi scheme cases.
The epic Tom Petters’ Ponzi in Minnesota — at $3.65 billion, one of the largest in world history — was essentially a “factoring” scam.
There also is a famous case in the United States and Canada involving Gerald J. Berke, an alleged “factoring” scammer and Ponzi schemer.
Berke, a Canadian, was associated with a California company known as GJB Enterprises, a purported “factoring” business in which investors believed they were financing accounts receivable and making loans to businesses.
The short story is this: the Ponzi went south, Berke high-tailed it north into Canada, the FBI said the “factoring” business was a “pretense” and issued a “Wanted” poster.
Berke was arrested in Canada, but has been fighting extradition in the alleged $81 million caper for more than two years.
A receiver filed successful clawbacks against winners. Berke himself hid $350,000 in Canada and tried to use the funds. The U.S. receiver sued in Canada and “the bank has been ordered to turn over all funds to the Receiver.”
Many of you probably have read Jordan Maglich either in Forbes or at PonziTracker.com. Jordan is an attorney at Wiand Guerra King P.L. in Tampa, Fla.
Burton Wiand of the firm currently is the receiver for the alleged Tri-Med “factoring” Ponzi scheme.
PPBlog
I just remembered something.
Is the Brothers’ construction company linked to that “Best Western” deal?
Bruna, you are looking for the wrong company.
As the report pointed out, Agrofruta is a ‘S/A’ company, located in Jaguaré city formed in early 2014.
But the Agrofruta you searched is a ‘Lda’ company, located in Serra city, and, believing in what you said, formed a long time ago.
@DMPontes
is this? infoplex.com.br/perfil/19691327000185
(Ozedit: Please don’t quote auto-translated comments)
Factoring means the same here. Some company has promises of money to receive in the future (usually in the form of bank checks) and transfers this credit to the factoring company for a smaller value, received immediatelly.
Legally, a factoring company is not a financial enterprise in Brazil (that requires government authorization, like banks), although it appears to act like one.
João,
Yes, I suppose is that one. The name is exactly the same referred on the report, and the company was indeed formed early this year.
(Acho que é mesmo essa. A razão social é exactamente a mesma descrita na reportagem , e a empresa foi mesmo formada no início do ano.)
You think they picked AgroFruta name intentionally to confuse people?
what about breaking news of Telexfree masterminder Carlos Costa’s death..
That’s hard to tell. Espirito Santo State economy is mostly based on agribusiness. So there’re tons of fruit and related products companies.
Costa’s family may have chosen one company on the rural area to hide things, or they just knew someone already who gave the tip.
Who knows.
Oz, see this post Telexfree ponzi scheme. This first link has broken.
conecctbrasil.com
All in Portuguese, seems destined to Brazilians, despite showing a Uruguayan address on the site.
This second address is virtually a copy of the previous site.
worldrevoluttion.com
Is starting now and seems destined for Spanish-speaking people.
The record was made by the Brazilian Matogrosso, but reportedly this address does not exists here in Brazil as well as also the phone number.
(Ozedit: link cited here does not work)
See registration site Conecc Brazil that I had sent the previous comment. It’s the same person who registered Revoluttion World.
drive.google.com/file/d/0BxE5fb4yOLLXdjI5cHdmQUx0eWM/edit?usp=sharing
@Abdul
Didn’t happen.
@Emilio
Alexa shows it launched right when TelexFree went down, and then didn’t go anywhere.
Seems to be dead in the water, like most of the other post-TelexFree clones.
Here is another photo link did not work.
https://drive.google.com/file/d/0BxE5fb4yOLLXMDlpRWlYd1VKM28/edit?usp=sharing
As was already mentioned, Conecct Brazil is already dead and the World Revoluttion is starting. But what I wanted to show is that the sites were registered by the same person who is Brazilian both in his name and also the state that he lives.
The detail is that these sites look like foreigners, since the site is dead says Uruguay, and another site despite not make reference to some Spanish country, he is in the Spanish language.
Sounds like what the Indians love doing with their UK business registrations.
I suppose if the Brazilian clone flopped, the Spanish one isn’t going to do any better.
Yet victims are having here in Brazil, maybe they will do less.
Got some here that have done more victims after Telexfree as Luvre, Paymony, Multiclick, Priples, BBom. Has two already have a lot of complaints, but are still active and which are ClickDreams and OneThor.
Rumor has it Carlos Costa will launch something “bigger than Telexfree” soon. Some say it will be located in a tax heaven. Word is not fully on the street yet but we see a lot of former top TF pimps sharing that idea.
Elections in Brazil will occur on October 5th. Costa by now must already know he won’t be elected and is starting the execution of his “plan B”.
In this campaign video (http://youtu.be/pZAY0_UwrCo) at 1:00 Costa says: “One thing I know: If Telexfree was the only project in my life, I’m sure God would take me away but, since He gave me this opportunity, something bigger is comming and I count on you all”.
I can almost hear zombies’ velcro wallets being opened to help their “messias” in one more scheme… What a shame,
Colombia has shut down TelexFree Colombia operated by locals.
See http://patrickpretty.com/2014/09/10/bulletin-government-of-colombia-investigates-telexfree-ties/ for initial report.
What, you mean just like the notion that filing for bankruptcy might some absolve you of running a Ponzi empire was shattered, so too might the notion that running for goverment is a get-out-jail-free card for Ponzi kings?
Say it ain’t so!
With US and Brazilian regulators on his back, Costa isn’t going to be launching anything with even a hint of longevity.