TelexFree bankruptcy denied, BBOM fraud thwarted
Brazilian regulators are currently on fire in their handling of both the TelexFree and BBOM Ponzi scheme fraud cases.
Setting an example that India and other countries drowning in Ponzi and pyramid scheme fraud would do well to follow, Monday firstly saw TelexFree denied their bankruptcy protection application and then on Tuesday, the uncovering of a fresh $8.6 million USD fraudulent transfer attempt by BBOM that prosecutors managed to thwart.
Late last week news broke that TelexFree was going to file a Bankruptcy Protection application in the Brazilian state of Espirito Santo. The application, filed on Thursday, was largely seen as a desperate attempt to stall investigations into the company. The granting of Bankruptcy Protection to TelexFree would have seen all investigations into the scheme automatically suspended for 180 days.
In order to win their application, TelexFree had to present a judge with a “recovery plan”, in which the company was not permitted to use ‘assets and bank accounts blocked by the (Acre) injunction‘ to settle its debts.
Upon hearing this I figured TelexFree were going to dip into their global affiliate investment funds, much to the peril of TelexFree’s non-Brazilian affiliates.
Turns out TelexFree’s plan was much simpler than that, with the company arguing that, despite having the same owners, Ympactus Commercial LTD was a separate individual company to TelexFree.
The basic thrust of the argument behind the Bankruptcy Protection application was that TelexFree could pay off Ympactus’ debts, presumably using Ympactus’ money. Ympactus couldn’t use the money frozen by the Acre injunction but TelexFree could.
Ympactus also claimed to have “severed ties” with TelexFree, and that they would seek a partnership with another VOIP provider if granted Bankruptcy Protection (which would no doubt somehow be connected to TelexFree), with the goal of regaining their Brazilian VOIP marketshare.
As absurd as that logic sounds, that’s what TelexFree presented in court. Along with the labelling of the Acre injunction as ‘teratological, illegal and unconstitutional‘.
Not suprisingly a Judge tore TelexFree’s argument to pieces and denied the application.
Hearing the case, Judge Braz Aristóteles dos Reis firstly pointed out that in the public eye, TelexFree and Ympactus are one and the same company. That withstanding, they both also list James Merril as the owner in official company-related documents.
Furthermore, according to Brazilian law a company provided as a credit source in a Bankruptcy Protection application has to demonstrate active operation for over two years. Ympactus failed on this count with tax filings only dating back to 2012.
TelexFree’s lawyers attempted to argue that Ympactus had been in business since 2010, however the Judge threw that argument out after it was revealed for the months of September and October 2011 at R$63 ($28.63 USD) and R$21 ($9.54 USD) respectively.
These amounts, in the Judge’s opinion, clearly demonstrated Ympactus’ failure to meet the requirement of “regular (business) operations) for two years prior.
With a successful Bankruptcy Protection application likely seeing the unfreezing of Ympactus’ Brazilian assets, quite obviously the plan was to get the assets unfrozen and to pay off affiliates using TelexFree.
Effectively Ympactus would pay itself by routing the money through TelexFree, thus circumventing the Acre injunction which prohibits Ympactus from paying its affiliates.
TelexFree are free to appeal the Judge’s decision, however TelexFree winning an appeal would appear to be an unlikely scenario.
Meanwhile over in the BBOM case, the company was again caught with its pants down as it attempted to pay off its affiliates through a shell gift card company.
Setting up the company “Webcard Administrator Card Ltd” in the name of BBOM’s Managing Director, Aline Rizato Riguetti, the company hoped to transfer $8.6 million USD to the company, load the funds on to gift vouchers and then passed onto BBOM affiliates as a ROI payment on investments made with the company.
Public Prosecutors picked up on the attempted fraud when BBOM attempted to transfer money to Webcard Administrator Card from one of BBOM’s currently frozen bank accounts.
Whether or not BBOM will be fined for trying to circumventing an asset freeze on the company is unclear.
Just last month BBOM was caught out trying to pay affiliates with funds transferred to a bank account belonging to Cristina Dutra Bispo, wife of BBOM Director Ednaldo Alves Bishop. Public Prosecutors uncovered the transfer were granted an injunction against BBOM thwarting the transfer.
As always, stay tuned for more hilarity as two of Brazil’s biggest scams of late continue to battle Public Prosecutors in court.
I wished I was joking about this one, but this is what Telexfree top distributors are saying on facebook:
(no comments… lol)
WOW thats incredible the amount of lies that come out of there mouths is sad …. i say RIP Telexfree
The court website was hacked? Oh dear… now they just need Carlos Costa to put up a video about it and it will be “official”.
I’ve edited the article a bit after going over additional information this morning, and it should now more accurately clarify some of the reasons TelexFree’s application was denied.
Costa’s new video is out. He calls the Judge’s decision strange and mentions TelexFree “has documents”. The documents apparently prove Ympactus have had standard business operations for over 2 years… which begs the question why weren’t they presented in court then?
The documents show an “activation” date for Ympactus of March 2010… yet the Judge ruled that because Ympactus showed practically zero revenue until recently, the company has conducted normal business operations for over two years.
What Costa’s point is I’m not sure, as clearly when you’re not generating revenue a business that’s designed to generate revenue is not conducting normal business operations.
Costa holds up a whole ton of documents but does not discuss the crucial tax revenue filings, which is what the Judge used to rule on (amongst other things).
They appear to have shot themselves in the foot on that front likely running affiliate revenues through TelexFree, with Ympactus only serving as a front for the TelexFree Ponzi, hence bugger all revenue until recently.
One interesting paper Costa holds up is a snapshot of Ympactus’ creditors, of which not surprisingly affiliate investors make up the bulk of at R$230 million ($104 million USD).
The document is signed September 2013, but I’m not sure if it’s affiliate ROIs for the month of September, what affiliates have invested into TelexFree (sans net-winners) or whether it’s what every Brazilian affiliate is owed in the company (unlikely as the figure is too low).
Costas mentions the company has R$ 600 million to pay out, so I’m going with this is just what they owed Brazilian affiliates in weekly $20 ROIs for the month of September. This gross understating of TelexFree’s actual affiliate investor credit debt is probably why it was rejected/ignored.
The fact that TelexFree has taken in R$ 600 million speaks volumes about how understated their estimated owed money was (what’s 600 million times 20 times 52?).
I’m guessing the TelexFree US payments is either money laundering or Costa, Wanzeler and Merril paying themselves.
Oh and the problem of TelexFree not being permitted to pay off TelexFree’s debts appears to be totally lost on Costa as he does not address the issue.
Finally, Costa confirms an appeal will be filed “tommorow”, which I believe will be either Wednesday or Thursday Brazil time. Hearing maybe Friday or more likely early next week.
Costa is “sure TelexFree will succeed”. Did you hear that Pinky? This time will be different, we simply cannot fail!
Perhaps TF can produce a new document signed by GOD to prove in court that they are not an elaborate ponzie scheme.
This is false news! Hackers attacked the Court Justice website!
Apparently Costa didn’t get the memo.
Telexfree affiliates should feel insulted by Costa. This guy insults thier intelligence everytime he opens his mouth. He obviously thinks their such blithering morons that they will believe this stuff.
Well, there was the Best Western thing, and then the insurance, oh and then……. Sigh, Unbelievable.
It’s probably what they had in their backoffice when the company was blocked
If Brazilian procedures are consistent with those used in the US, such a schedule would reflect the amount owed to creditors (promoters etc.) as of the date of filing.
Who would Wilson Furtado Roberto be in this?
That’s correct. I found the same description in some of the translated sources. “Money owed to affiliate investors” from Costa’s point of view is the amount they had in their backoffices when TelexFree was blocked.
He’s repeatedly trying to cheat people, using EVERY method he can find. It has probably become a HABIT or a lifestyle.
(post #4, Oz):
It was mentioned in the court notice, as one of the reasons for why the bankruptcy protection was denied. TelexFree Brazil (Ympactus) are trying to pay TelexFree USA = the defendants are trying to pay themselves.
Both the attorneys, Roberto Wilson Furtado and Danny Fabricio Cabrai Gomes are owed a salary of R7.5 million each, probably as a bonus for delaying the case. The different law firms are only owed a more standard salary (R20,000 – R60,000).
Carlos Costa can be really generous. I maybe should offer him my professional assistance, “one of the best you can buy for other people’s money”.
Probably a law firm. They are owed 7.5 Million Reales or about 3.8 Million US. No doubt is an inflated number that will be challenged eventually.
As it sits now they appear not to have been paid and the way things are going they will become an unsecured creditor in any dissolution.
Can someone explain to me why Telexfree USA is still up and running and recruiting new victims?. I have several friends who signed up and are convincing me of singing with Telexfree. Please HELP!!!
So in other words they tried to pull a shifty and didn’t count the projected ROIs they’ve been guaranteeing.
Even if the funds weren’t from TelexFree (paying yourself, lol), no wonder the Judge knocked them back. Anyone can see that the hundreds of millions of dollars owed is progressively spiralling out of control in true Ponzi style.
In six months that $600M will vanish faster than Costa’s credibility did.
Sure. Here’s why:
As long as people keep investing they’ll keep paying out (that is if they’ve started actually paying people yet after the GPG fiasco). Eventually however the whole $20 a week not even coming close to $289 per affiliate thing will catch up with them.
Telexfree is listed as a creditor of Ympactus SA and according to the bankruptcy filing owes it commissions from 2012 and 2013, as well as fees for for “utilizacao da marca” (use of trademark.)
The divulgadores (affiliates) are also listed as creditors of Ympactus (.
It seems pretty clear that a lot of money was due to and probably collected by the owners of the trademark Telexfree.
Nothing that I have seen enjoins the trademark owners from selling, licensing or generally capitalizing on the trademark wherever they can. Based on the way things were structured in Brazil (Telexfree licensing the “marca” to Ympactus) I would guess a similar licensing arrangement has been signed with a group in the US. and UK. Such licensing can certainly include geographic restrictions, consulting fees, commissions etc.
The trademark is in some respect being franchised. Who operates the franchise in the US is unknown to me.
Well this is interesting, Globo are reporting that Costa is considering a “plea bargain”.
Costa mentions the plea bargain in addition to the company’s lawyers filing an appeal over the bankruptcy protection denial.
Considering a plea bargain is
And only applicable in criminal law, I wonder what the charges are?
Also apparently TelexFree are orchestrating a theatrical “breaking” between TelexFree and Ympactus:
Lol at severing ties with yourself, James Merril is listed as an owner of both lolol. These guys are class act clowns.
Some more information on the liklihood of Costa’s quoted debt figures not including the 300% ROI TelexFree guarantees affiliate investors:
So far, it has only been shut down in Brazil. Not completely shut down, but very close.
It’s impossible to predict anything about TelexFree USA in the short term. It will eventually be shut down by authorities or it will run out of investors.
TelexFree Brazil (Ympactus Comercial) and TelexFree USA have both exactly the same owners, the same website, the same database etc., so they are basically the same group of companies.
The owners are defendants in the case in Brazil. They CAN receive a Court Order heavily restricting the activities in the USA (“voluntarily” restrictions). They CAN also receive an order from the Brazilian court through a court in the USA (enforced restrictions).
If you want a quick overview of the case (mostly about Brazil)
* scroll to the top of this article
* click “TelexFree” right under the headline of the article
* that will bring up a list of 20+ TelexFree articles
A quick look at the headlines June 18th – current date will give you a quick overview for the situation in Brazil (14 lost appeals till date). You don’t need to read too much to get a quick overview.
If you want to update your friends about something (something that potentially can affect them), then I can only offer you some vague information about an upcoming trial in Brazil. We know there is an upcoming trial there in the beginning of October, but it can be delayed for 4 weeks. We know too little about the charge sheet there.
It’s not a very good idea in itself to offer people vague information, so I don’t think you should update your friends about it. “People must first WANT IT before you should offer it to them”.
I am at a big disadvantage since I do not know the law or the language of Brazil and the translations I am reading are not very clear but it seems like the “plea bargain” mentioned in the article is really an offer of settlement by Ympactus vis a vis the Acre Prosecutor.
Ympactus may hope to limit the scope of their exposure, admit to a few minor offenses, and pay a fine in hope of keeping the company afloat.
Its noteworthy that the creditor list contains what appears to be an architectural development firm. Ympactus was midstream in the building of a hotel of course and its not inconceiveable that it has lots of equity/affiliate dollars that have been sunk into that project.
Add to that, the rumor that they are willing to cancel their affiliation with Telexfree and it may be speculated that they want to present a very cleaned up appearance to the Prosecutors Office (without the Telexfree baggage) as they attempt to bargain for a settlement that will save Ympactus as a going concern.
If that’s what TelexFree’s lawyers are trying to do, just how stupid do they think everyone is?
Present squeaky clean company to the PP, enter into a plea bargain, pay off whatever fines come your way with stolen Ponzi money… And then what?
Wait a week and re-enter Brazil as “TelexPaid”, owned by Costa Carlos, Mim Jerril and Warlos Canzeler, having absolutely no assocation with TelexFree and “selling” PIOV telephony packages to front “AdDivorced” affiliate investments?
These guys have racked up hundreds of millions of dollars in Ponzi liabilities and have taken in R$600M from Brazilian affiliates. Good luck plea bargaining your way out of that…
The paper you posted here show indeed the amount owed by Telexfree at the present date, assuming all of the ROI owed is “frozen” since June 18th. So they are not adding up the value distributors “would” have by today, but instead it’s the same value it was owed for ROIs until the date of the blocking.
All the papers Carlos Costa show in his videos were indeed presented to the judge. But the judge considered to be insignificant, as it did not prove the company was having an “active” status (no revenue, etc).
The fact is that everything was SEEN by the judge, but he just concluded that wasn’t enough to prove the “active”status… of course, a revenue of R$60 per year is NOT a running company… dã-ã!!!!
OZ, Lastest news on BBom:
Today the director released a video, saying he was in Brasilia, and that the “vacation was over!” “Tomorrow we’ll give you all the details”.
All affiliates are going CRAZY, saying they are back and up and running…
My guess is: NOT! haha
Sit down and watch it closely as this story unfolds this Thursday. I’ll keep you posted.
Bank of Brasil froze up to $6 Billion USD (with a B) on June 19th.
The original source is a link posted by one of the Brazilians, posted in the same section of a thread where the 87 page scanned initial complaint from Acre PP was posted. The source is the same as the $101.7 million illegal transaction.
You have read the source, and your comment was “Holy lack of formatting!” plus “Looks like they’re subpoena’ing someone”.
The original (untranslated) source shows 6 Billion Reais (not USD), but it’s still a healthy amount.
Original source (link disabled), notice #13 from the top:
Yeah I was gunna say, $6 billion USD? Holy crap when did that happen!? 🙂
I doubt the prosecutor would agree to terms allowing for that.
Maybe TelexFree could just hack the court website and bypass having to argue the prosecutor in court altogether.
Y’know… like the (insert random Brazilian vigilante group here) did to stop TelexFree’s Bankruptcy Protection application.
Maybe then they can also hack government websites and make Carlos Costa the President of Brazil… that’d probably help their cause somewhat.
BRB, feeling a bit tired – going to hack the court website for a cup of coffee…
“up to” being the operative phrase. As I recall the actual amount frozen was considerably less.
Well if the National Security Agency of the United States is able and willing to hack into the diplomatic communications of the President of Brazil, I suppose it does not seem so far fetched to the more primitive divulgadore that secret government agents are hacking away at the Ympactus bankruptcy files.
I’m starting to believe it myself.
Bbom still blocked
We all knew that, it’s amazing how affiliates could believe they were gonna be unblocked from one day to another like this…
IT was good, because now for the first time we can see some BBom affiliates really pissed at the company. Before they were only pissed at the Brazilian Justice…
Hello, yesterday the president of BBOM company release a vídeo where he said about the unfreeze: “it was a misunderstand”, i said vacation is over, but you will work with direct sales of our products in agreement with the terms of Brasilian Association of Direct Sales.
In other words he want people to sell just like Avon or Mary Kay companies. The investidors are in rage against the company saying on facebook “Close the company and give me my money back”. Sorry for my english 🙂
That’s clearly a popular decision. 🙂
“There’s no easy money anymore, but you can earn a standard MLM commission by selling the product to family and friends.”
BTW, the audience here is assumed to be international (all types of languages). We will look at factual content rather than at grammar and spelling. I used “Google translate” for all my first posts, and that’s also why I identified country name in my user name in the first posts.
Were not blocked R$ 6 billion. This value was just the limit established by court order. Were blocked approximately R$ 600.000.000,00 (U$ 260.000.000,00)
Looks like new appeals are going to both the Superior and Federal Courts.
On “the last day of September” Acre’s Court granted TelexFree permission to file “special and extraordinary” appeals against the Acre injunction in both the Superior and Federal courts.
TelexFree’s request to have the injunction lifted upon permission being granted to file the appeals was denied.
No date on when both courts will rule on the appeals, however it’s expected they’ll receive the appeals (passed on from the Acre court) later this week.
TelexFree has previously had appeals filed in both courts rejected, on the grounds that they cannot intervene in a case currently being heard in a lower court until it is concluded.
Commenting on the latest appeals, Isabel Galloti, the “minister” who denied one of TelexFree’s previous appeal attempts in the Superior Court, said that chance of either appeal being granted “is small”.
The Brazilian media attempted to contact TelexFree’s lawyers for comment however they “did not respond”.
I thought this was a bit of an odd move from Acre’s Public Prosecutors. They filed a motion requesting the shifting of burden of proof, meaning TelexFree would have to prove they are not a Ponzi scheme as opposed to the PP proving they were.
The motion was heard and dismissed yesterday:
The case is pretty much slamdunk with zero external revenue and affiliates simply paying eachother. Wonder what the strategy was behind the motion on the PP’s side. The only thing I can come up with is they might have been trying to speed up the process.
I figure it’s quicker to have TelexFree fall on their sword then present why they are a Ponzi scheme and have to sit through umpteen appeals and Carlos Costa videos.
Not that I understand the Brazilian court system, but perhaps Acre prosecutors are claiming “we presented enough evidence for the injunction to be granted, how much more do we have to present for a conviction?” And the judge say, now, now, you can’t go slacking off like that… 🙂
same here ,but it seems like the acre PP is saying ‘hey, we caught you , now prove you are not the murderer’
i’m thinking this action of the PP, shows nervousness about tackling all the grey surrounding MLM .it’s like saying , we know you’re wrong,but maybe we cant prove it , so why don’t YOU prove how you’re right ? 🙂
the spectrum between black and white is too wide in MLM and ALL companies are somewhere in between .if you cant handle it , ban all MLM and be done with it . other wise , make some simple commonsense rules ,and give it a long rope.
with technology and banking today, becoming increasingly independent of govt controls or geographical boundaries, MLM cannot be removed, only regulated. that way at least the host country can make some taxes from it instead of losing all the money to offshore bank accounts.
Except that they have already, no less than fifteen times; once at the injunction hearing and fourteen times in subsequent appeals.
All fourteen appeals were denied along with the initial Acre injunction being granted as a direct result of evidence presented by the PP in court.
But please, don’t let that stop you from going wildly off topic.
Oz has already said it, don’t let plain and simple logic prevent you from making up all sorts of imaginary explanations that can make your own Worldview feel more rational. 🙂
Reverse Burden of Proof is not uncommon in civil cases, but it’s not very common either. The normal rule is that the party presenting a claim has to prove it. Reverse Burden of Proof can have a function if one of the defendants doesn’t respond properly to a subpoena disclosure, e.g. holding back requested information in an attempt to delay a case.
The Court’s response was simply about “We will not adjust the procedures and the rules (as an initial solution to something)”. Civil procedure probably have other rules they can use, reverse Burden of Proof isn’t a correct initial response to something.
1. The Court sent out subpoenas to the defendants and/or witnesses on September 3rd, with a 4 week deadline = now.
2. The Public Prosecutor have probably not received all information requested from all the defendants, and are asking for reverse Burden of Proof.
3. The Court denied that, the potentially missing information can be collected in other ways by using proper procedures. Reverse Burden of Proof isn’t a proper rule, it will heavily distort the defendants normal rights of having a fair trial.
4. New subpoenas will have to be sent out, collecting the potentially missing information. Missing information can be used as evidence in itself, e.g. as evidence for that a defendant either haven’t followed correct business practice or have destroyed evidence. The new subpoena will eliminate potential misunderstandings.
5. The Judge can accept the missing information as the defendants defense = “the defendants have produced no evidence at all in support for their claims” or “the defendants have produced invalid evidence in support for their claims”. That will allow for using “weight of evidence” against the defendants.
It makes some sense in the explanation I gave. I’m not sure it is CORRECT, but it places the request for reverse Burden of Proof into a logical context. That logical method will often be close to correct in its conclusion, but not in all the details. It will fail if you add too much from your own imagination rather than from actual knowledge.
One or more of the defendants have probably failed to produce the requested evidence, e.g. financial records or member information.
The PP have delivered inconclusive evidence because of the missing information from the defendants, and are asking for that to be accepted as valid evidence. “We have produced what we can, but the defendants have failed to produce their parts. We ask for the missing evidence to be counted as proof in itself, unless the defendants can prove otherwise”.
The June 18th injunction was a preservative injunction, “freeze assets, stop the activities and preserve information”. The August 12th hearing backed it up with a charge sheet, making the injunction become permanent until further order.
The case is currently in a pre-trial stage = production of evidence. It’s a civil case = the evidence will be requested “voluntarily” from the parties rather than being collected through a criminal investigation.
One failed attempt to collect evidence from a party can be related to misunderstandings. Two failed attempts will show that the party is unwilling or unable to produce the requested evidence.
A defendant can have “legitimate reasons” for not being able to produce requested evidence, e.g. financial records. “We didn’t run it like a real company but as a fraud, so we don’t have the records required for a real company”. 🙂
You can’t blame people for not having records they don’t have, or blame them for being unwilling to incriminate themselves. But that also mean they don’t have any valid defense against the charges, they only have poorly supported claims. They can show videos of Carlos Costa waving some papers, using “insanity” as a main defense.
The reversal of the Burden of Proof relied on Telexfree’s relation with it’s associations being considerated a consuption relationship.
In Brazil, reversing the Burden of Proof is kind of standard in those relations.
Ironicaly, Telexfree escaped the Burden of Proof because the court considered that they were too far from having a true consuption relation with their affiliates, although they should have one.
Each Telexfree “promoter” had to maintain at least one Voip account active, but the judge consider that the accounts were not the reason people entered Telexfree.
Because of this, the burden is still on the accusation.
TelexFree promoter recognized as employee by a court in Rio Grande do Norte.
That’s the problem with specialized courts, they often become TOO specialized in what they’re doing, and fail to analyse facts correctly.
The Judge in that case doesn’t have the correct qualifications to analyse whether it’s about work or investment = he doesn’t have the qualifications needed to analyse the Court’s jurisdiction correctly, the most important part of a case.
Original source (link disabled to avoid moderation queue):
That kind of puts the whole Carlos Costa celebratory video in a new light.
Are they seriously cheering over a judge pretty much basing their decision on the fact that TelexFree’s product front was a facade?
There’s a few bits of weirdness going on in Brazil at the moment.
I saw earlier today that some ex-consumer protection employee recruitment ringleader went crying to the courts about his lost money and got some sort of settlement promise or something.
I think he’s going to have trouble cashing in his request until the criminal matters are sorted out.
Other than noting them I’m pretty much ignoring these secondary cases till the Acre PP action comes to a conclusion. I think if anyone goes to a higher court to override what’s going on in Acre they’ll just be dismissed.
can you please tell me the lastest on telex free.
I live here in the states and I just joined telexfree this past Saturday after watchin a presentation. Should I bee worried about the future if telexfree?
All Ponzi schemes collapse when new investors such as yourself stop jumping on board and investing.
Whether that worries you or not is up to you.
Sorry for the typo I was half sleep when I wrote that. I guess I’m kinda backwards.
I joined at the spur of the moment and now I’m doing a little research. I don’t really feel so bad because I didn’t break my pockets like some people I saw do at the meeting the other day.
I was just doing a search of forums that were discussing this company and it’s future here in the states as well as abroad. Be it that I’m new to this whole thing I don’t really have much to say about the company good or bad. Just here to retain as much info from you pros as I can. Thank you all.
Minor update: The civil case returned to court last Tuesday (15th October) with a mediation conference being ordered between TelexFree and Acre’s Public Prosecutors.
The Public Prosecutor’s Office has issued a statement that the only settlement they will agree to is the voluntary shutdown of TelexFree and return of invested funds to affiliates, so it appears unlikely that the conference will achieve anything.
When approached, TelexFree’s lawyer Horst Fuchs refused comment.
Personally I imagine it will go something like this:
btw do keep in the loop with updates, since, I am presently looking at this business from the point of view of exposing them in the UK.
Minor update, court will use frozen TelexFree assets to pay off the hotel payments debt. I believe TF were at risk of losing the previous money invested if payment installments were not met.
I suppose if things fall through later their stake can always be sold off to contribute to the kitty fund to pay out investors with.
Money will be transferred directly to the construction company by the court, so there’s no chance of Carlos Costa paying himself off (unless he has a shady deal with said construction company).
Wonder how much did they pay to claim to be building those hotels?
(slightly offtopic, can some Brazilians check the WCM777 shutting down US ops topic to see if you spot any “ringleaders” out to scam more money in the comments?)
So apparently there is *some* kernel of truth that “TelexFree is building hotels with Best Western”, but how much money is owed by them?
I think it’s just a financial investment. TelexFree stumps up $x of affiliate investor money towards construction and get >100% of $x according to the terms set out in a contract between them and the hotel company.
I’m thinking a personal investment made by Wanzeler, Merril and Costa paid through the company. Affiliates earn $20 a week, regardless of what happens outside of the company’s compensation plan.
Also they have registered two new companies in the UK.
And a simple scan to the foot of their website will show this address:
also possible to do further searches here for UK based companies: companycheck.co.uk which a free resource and provides details of directors and their addresses too.
We don’t “produce” updates here, they will need to happen before we report them.
Factual info works best, from the point of view of exposing something. People will typically be looking for factual info.
That idea is based on the type of questions I received the first time I tried to expose something. That type information should preferrably come relatively early (e.g. in a forum thread, or anything similar). NEUTRAL and FACTUAL info will be “acceptable” for a wider range of audience than biased types of info.
I have simply looked at it from my professional viewpoint (as a sales person). “What does the customers (readers, audience) ask for?”, “What TYPES of customers are there out there?” and similar types of questions. That’s a typical sales man logic, I will look for what people are asking for rather than trying to push a product people are not very interested in.
You have a blog. As far as I could see, it covers a relatively wide range of topics. It will be relatively difficult for me to identify which TYPES of information you (your readers) will be most interested in for TelexFree. We have mostly covered the situation in Brazil, with a lot of help from local contributors in Brazil.
You will find 20+ articles about TelexFree if you scroll to the top of this page, and click on “TelexFree” right under the headline of the article. I will typically recommend that method if people want to get a quick overview fast, “look at the headlines and the dates the articles were published”. That method will give them a chronological overview.
We are relatively poorly updated on the situation in USA or globally, other than the official information from TelexFree itself and from different affiliates.
Best Western hotels are independently owned and operated franchises. The contractual and financial arrangements between Ympactus/Telexfree and BW have not been made public, but if its true that “money will be transferred directly to the construction company by the court”, I would not automatically equate a decision to pay a Brazilian construction company with an agreement Ympactus-Telexfree may have had with Best Western International.
In my view the Court is doing what it can to ensure that a major asset of Ympactus/Telexfree does not go to waste. One way to do that is to pay the contractors so that the unfinished building (pictures I have seen show an unfinished building) does not go to rust and ruin.
Presumably the building will eventually be sold and the proceeds used to administer a Receivership-like entity for the benefit of the Ympactus=Telexfree creditors.
That hotel repayment was about the asset being worth more to pay out affiliate investors who lost money intact than if TelexFree defaults.
They’re divvying up TelexFree’s assets already… anyone who thinks they’re going to prove they aren’t a Ponzi scheme in court is delusional.
I wonder if it was the developer or TelexFree’s lawyers demanding 10% of the payment in legal fees? If it was the latter sounds like TF might be having trouble paying its lawyers too.
I am not sure what you said but the judge allowed the payments to the developer with restraints and conditions. Apparently the Promoter argued against it but the judge was persuaded to try and protect Telexfree’s equity. In any event the hotel is now “pledged” to the Justice of Acre.
Not exactly. It appears that the Tajuca Hotel SPE (special purpose entity) owns the hotel. Telexfree is likely the only member and manager of the SPE. For discussion purposes we can just say Telexfree owns the hotel. This is consistent with the progress in the case thus far.
Telexfree is under a dark cloud of suspicion and an injunction but there have been no rulings that would permanently divest them of their property.
Not yet, but the judges certainly aren’t taking any chances.
Guess they figure Costa, Merril and Wanzeler might pull a dodgy if the funds were released to them.
I note that the attorneys divulged that Telexfree was first established in the USA and that it owes $29 million to its founders. Couple that with the attempt it made to transfer funds out of Brazil post-injunction and its pretty clear the court feels the need to keep its boot on Telexfree’s neck.
And now Telexfree’s trial file has over 40 thousand pages, and still growing. For comparison, it would be like reading all the 5 published books of The Chronicles of Ice and Fire 11 times!!
Judge Thais said it was the biggest she ever worked on.
Brazil is a civil law country. It has an inquisitorial system. a judge is involved in the preparation of evidence along with the police and in how the various parties are to present their case at the trial.
This is markedly different than the Anglo-American system which is adversarial not inquisitorial. Hats off to Thais Borges. She has a very difficult job.
Minor update, Acre Public Prosecturs appealed the burden of proof decision with the appeal being denied.
As it stands the Public Prosecutors must prove that TelexFree is a Ponzi scheme. Dunno why they’re appealing this as it should be a slamdunk case as per TelexFree’s AdCentral business model.
Meanwhile the mediation conference has been set for November 14th.
I haven’t been able to confirm/deny the recent Bank of America information. Treating it as unconfirmed for now till I see otherwise.