TelexFree making selective payments in Brazil?
There’s been a lot of talk over the last few weeks over the R$500,000 the state of Acre has been ordered to pay up in the TelexFree case.
General consensus is that it’s a legal strategy with TelexFree hoping that the case will be dismissed because Acre, one of Brazil’s poorest states, won’t foot the bill.
Commenting on the issue and fully aware of the recent floods that have left many in Acre homeless, TelexFree owner Carlos Costa remarked
I do not believe the governor (of Acre) will authorize this payment, because he will be making the people of Acre pay for a private company to make a case against another private company.
TelexFree have thus far been unable to get anywhere legally (twenty something defeats in court to date and multiple fines for acting in bad faith), so hitting the government’s hip-pocket appears to be their new ploy.
The case against TelexFree is now in the “expertise” stage, meaning that an expert or experts are going to be called on to provide evidence as to why TelexFree are a Ponzi scheme.
Usually in these cases it is the defendants who bear the costs but last year TelexFree filed an appeal on the grounds that because their assets were blocked, they would be unable to pay.
Judge Thais Borges agreed and ordered that the plaintiffs pay for expertise. According to Brazilian law, because the Public Ministry of Acre is an autonomous body they are ‘exempt by law to pay the fees for expertise in civil suits‘. Thus the burden has been passed onto the state.
Again, TelexFree are were obviously aware of this when they filed their appeal, and are counting on the state refusing to pay.
In response to a recent deadline issued on the expertise payment, the state of Acre have announced they will appeal Judge Borges’ earlier decision. Speaking on behalf of the Acre Attorney General’s Office, chief prosecutor Leonardo Silva Rosa Cesario told iG,
The Government can not be held responsible for these fees, because it is not party to the proceedings and did not having have the chance to speak about it earlier.
And while I don’t know the specifics of the appeal, I’m pretty confident that the decision is going to be reversed.
Just under two weeks ago Carlos Costa revealed in a YouTube video that the Espirito Santo IRS had fined the company R$70 million reias for failing to pay their taxes.
In the video, Costa frantically waved tax bank receipts around and made a big fuss over how quickly TelexFree paid the fine:
The R$70 million reias question? How did TelexFree pay the fine so quickly if their assets are blocked?
That TelexFree don’t have access to R$500,000 but can pay up R$70,000,000 quick smart just doesn’t add up. Well, perhaps it does if you look at it as a legal strategy…
Failing to pay the IRS on the belief they can hold the Acre government hostage over the R$500,000 and get the case dismissed serves TelexFree’s interests.
Paying for a bunch of experts to get up and tell the court how using new affiliate investor money to pay out existing affiliate investors is a Ponzi scheme, doesn’t.
All the Attorney General has to do is play the Carlos Costa’s latest video in court and ask TelexFree to explain where the money came from. You and I know it was just diverted from TelexFree’s offshore bank accounts (iPayout), but if they have to admit it in court then the notion that they can’t pay a measly R$500,000 becomes rather absurd.
R$500,000 represents just 0.7% of the R$70 million TelexFree just recently paid the IRS.
Hell, if I was the judge hearing the case, not only would I grant the appeal but I’d also fine TelexFree for obviously misleading the court and delaying proceedings (again).