Brazilian Court suspends TelexFree operations
When news broke back in February that TelexFree was under criminal investigation in Brazil, many TelexFree affiliates went into a panic with the company’s then recent attempt at US market penetration stalling.
Then, after the Ministry of Finance came out and publicly declared that TelexFree was “not sustainable” and “a Ponzi scheme”, court action escalated and, to the best of my knowledge, somewhere along the line an order was passed prohibiting the Ministry of Finance from issuing any further statements on the case (which remained in progress), and to take down information they had already published.
As is common with Ponzi schemes, affiliates with the most to lose in the company and fearful of the impact the Ministry of Finance’s statements would have on their investor recruitment efforts, news of the above order somehow got turned into this:
It’s official! The investigation on TelexFree has been absolved of what Behind MLM has researched and posted.
Comments like the above were widely circulated by TelexFree affiliates in a campaign of misinformation, aimed at reassuring existing and prospective investors that TelexFree’s Brazilian regulatory problems were over.
Cue breaking news of continued Brazilian regulatory action against TelexFree in 3… 2… 1…
Spearheaded by public prosecutors in the Brazilian state of Acre, yesterday a nationally binding court ordered injunction put a stop to TelexFree’s business operations, including the registration of new affiliate investors, acceptance of new investments and paying any returns owed on existing affiliate investments.
Brazil’s Globo reports:
The 2nd Civil Court of Rio Branco upheld a civil action proposed by the prosecutor of Acre, and suspended payments and the accession of new contracts multilevel marketing company Telexfree until the final judgment of the principal action, under penalty of a daily fine R $ 500 thousand.
Holding a press conference yesterday immediately after the order against TelexFree was handed down, Nicole Gonzales from Brazil’s Consumer Protection body stated
Owners of the company are suspected of mounting a financial pyramid.
Telexfree in Brazil is recruiting investors and creating a pyramid scheme under the guise of multilevel marketing.
There are multilevel marketing companies already established in the market as Herbalife, Mary Kay and Tupperware.
They work with this system, in the case of Telexfree the interest is not to sell products but to recruit new people.
The focus of Telexfree in Brazil is not the sale of products or services, but membership new people to feed the payment system.
Or in other words, precisely what I had concluded back in July 2012 when I published my initial review of TelexFree.
The order, handed down by Judge Thais Borges, orders TelexFree to effectively cease all business operations in Brazil with the decision affecting ‘the promoters of Telexfree across the country or outside‘.
The measure was taken to prevent new people end up involved in the scheme and may be harmed.
An order was also made blocking the bank accounts of administrative and management staff of Telexfree.
What this means for TelexFree’s US affiliate investors, and those who were sucked into the recent US recruitment drive is currently unclear.
One thing seems certain though, anybody who tells you TelexFree’s regulatory problems in Brazil are over is clearly feeding you porky pies.
Quick to respond to the decision and seeking to reassure their investors that everything was fine, TelexFree uploaded a video to YouTube claiming
the company has not yet been officially notified of the decision but that is taking all measures to overturn the injunction of Justice Acre.
Yeah, good luck with that guys.
It was only a matter of time.
Many folks are flash-blinded by the hype not realizing that in the long run, proper due diligence outweighs their desperation for a quick buck and the dangling carrots promising easy returns.
I’m expecting to see posts indicating “it’s not over” and “Telexfree will be exonerated”.
Can anybody get Gerald Nehra to comment on this?
The link you are providing is of 15 Feb 2013, the court decision was already done & they cleared TelexFree, send me your email id i can send you the attachment with proof.
By the way if you are personally not happy, or can’t help people to earn online then you should not mislead people as well. People believe in court’s fresh information.
Email me if you are having some thing to share
Aaaaand here come the hilarious TelexFree affiliate denials.
Evidently they don’t teach you how to read dates at Ponzi school. Maybe TelexFree can buy an educational institute next.
Oh wait… money’s frozen, right.
Do they use a different date format in Brazil ??
I see the press release being clearly dated: 18.06.2013
Isn’t that the eighteenth day of June ???
As in, “two days ago” and not and not “five months ago”
Which link are you talking about?
There’s a total of 4 links in the article, 2 of them leading to internal stories / reviews, 2 of them leading to external sources.
2 external links:
* “Globo” news story is dated 19.06.2013.
* “Ministerio Publico do Estado do Acre” is dated 18.06.2013.
The first link in this article leads to the story in February 2013, and it clearly says that it is about the old article:
If you only checked the first link, then OF COURSE it will be from February 2013. Did you expect something else?
oz you seems blind i think you read out the 2nd row of this artical & click on it you must educate yourself & check this link out behindmlm.com/companies/telexfree-under-criminal-investigation-in-brazil/
What it says & in April they have ( court) given a clean chit so if you don’t wanted to make money & help other people make money then look for some other business, only by pulling legs you won’t be able to successful
They weren’t ever given a “clean chit”. The court just told the Department of Consumer Affairs to not comment publicly on the case or call it a Ponzi scheme.
I hardly expect you to be able to read a court order though if you’ve read the article your commenting on here and still ultimately failed to grasp that TelexFree is only now being slammed in court. The case has been ongoing since it was first announced.
Wake up and smell the koolaid, your upline has been lying to you.
@onlinebiz, if only you made sense….
No need to email anything, onlinebiz.
Here’s the first few paragraphs of the Ministerio Publico do Estada do Acre statement INCLUDING the date of its’ release:
TelexFree clearly sells NO product, they generate NO revenue from product sales, they pay old affiliates (promoters of the sceme) and weekly ad posters (passive investors) a fraction of what they continue to take in from new affiliates in Classic ponzi fashion.
It’s amazing though how viral something will grow when you consistently pay people for a few weeks or months in a row. The claims of Brazilian affiliates has blinded so many others in many different countries who sadly will believe just about anything.
Apparently on a recent TelexFree USA conference call, those running the call advised US based affiliates that the recent Brazil injunction will not affect TelexFree operations in the US.
One TelexFree affiliate writes:
I suppose if TelexFree have bank accounts in the US (or elsewhere out of the jurisdiction of the Brazilian courts) they could continue to pay their affiliates. However the Acre court has made it very clear that any violation by TelexFree of the injunction, which includes paying a TelexFree affiliate anywhere in the world, will result in a fine of USD $100,000 for each payment made, ditto the registration of any new affiliate investors.
Part of the court injunction was the requirement TelexFree put up a notice on their website informing affiliates and visitors of the injunction, so TelexFree’s US investors aren’t going to be able to keep pretending this doesn’t affect them for long.
Meanwhile you’ve got other TelexFree affiliates running around telling people
TelexFree assets in Brazil are frozen. Despite the virtual headoffice in the US all operations were clearly headquartered in Brazil.
The company might be able to move money offshore but it’s likely their payment processor(s) will be informed of the decision in anycase. And then of course there’s the fines hanging over TelexFree management’s heads in Brazil.
The Acre Public Prosecutor’s Office has been ordered to file charges within 30 days of the injunction, so TelexFree dead for the timebeing.
As for the future, how many blatant Ponzis have come back from regulatory action?
Hey Oz, thanks for the information. I live near the State of Acre in Brazil and many people are believing in this big scam.
I almost fell for this because it is very tempting but I didn’t thanks to you. Thanks again man and keep up the good work!!!!
No worries Daniel.
No news on the injunction appeal yet.
TelexFree is NOT a scam. It will NOT be shut down. Do you think for one second that one of the largest Hotel chains (Best Western) would partner with a company who is misleading the public in any way?
These countries are just flexing their muscles because they can. The SEC thought that ZeekRewards was a Ponzi scheme and they were sadly mistaken or did everyone forget about that? Stop believing everything you hear on the internet and do your own research.
A Ponzi scheme is where new recruits pay for existing ones. In TelexFree, you don’t have to recruit anyone. Everyone has an equal opportunity to generate income. The have an excellent flagship product. They aren’t going anywhere.
Their attorneys will gobble up any negativity originating from authorities. They are in this for the long haul. I have been in TelexFree since January of 2013 and have been paid on time everytime. Stop hating and start earning.
^^ I really don’t even know where to start with that.
Switching to parallel universe mode in:
5, 4, 3, 2, 1
So you think the court is wrong? Or perhaps you’re just crazy?
To date, NOBODY can prove there is such a partnership. Where is the announcement?
And your proof of this is what?
Zeek was closed for 10 MONTHS already. Are you living under a rock or the moon? Or have you been hiding in a Brazilian jungle somewhere? Did you catch some jungle fever? This sort of hallucination can only be explained by brain swelling.
this is not the first time Carlos (Carlos Costa-Rodrigues) has been before the courts relative to a HYIP/investment scheme or pyramid ….the SEC has a very long memory
?? According to the filing Carlos Costa-Rodriques is an SEC attorney
Then he has changed his name?
I didn’t find any “Carlos Costa-Rodrigues” in the document, only …
Sanderley R. De Vasconcelos
a/k/a Sann Rodrigues
a/k/a Sanderley Vasconcelos (“De Vasconcelos”)
The other defendant was Rev. Victor Sales
a/k/a Victor Williams
a/k/a Victor Sales DeBrito (“Sales”)
The scam itself was about Universo
f/k/a FoneClub Incorporation (Incorporated in Massachusetts)
I believe it’s a dead end, but the case had some similarities to TelexFree.
Maybe Ray is saying that SEC attorney, Carlos Costa-Rodrigues, has a long memory. Costa-Rodrigues’ name can be found in the signatory list at the bottom of the last page.
According to Acre prosecutor’s office official news, the appeal by TelexFree has been denied (by a different judge).
About the deal with Best Western:
Yes, they are building a hotel and Best Western so far agreed to have their brand running the hotel, once it’s finished.
In other words: Since they Telexfree is being prosecuted, it is VERY likely Best Western will cancel the contract.
I suspect there will be a half finished hotel on the market sometime in the next six months….and what need did Telex have for a hotel in the first place?
Free rooms for all of their top affiliates, perhaps?
I know a lot of people that are a part of telex free in Brazil and its at the point where they are banding together to protest the decisions of the court. They simply won’t let go of it.
Now playing on peoples emotions showing photos and stories of handicapped people finally being able to make a living. Never mind all the recent drama with Mapfre that they still deny.
I get that the Brazilian government would rather build stadiums then feed starving families and get proper medical care and that telex free provided a way for these people to support themselves, but it doesn’t make telex free legal. That’s what people won’t accept.
They got paid well and on time and now it’s ending and they are going after this judge as if she’s ruining the lives of thousands of citizens. A lot of hate going around. Hope this is over and gets resolved soon. My Facebook feed cant take it anymore.
Anyone here get burned on ZeekRewards? This TelexFree is the same thing, from what I can see….. recruiting to buy a worthless product and place ads for income.
When they shut down Zeek, the owners denied it, said they would prevail, then a few days later, signed a cooperation agreeement with the Securities agencies to avoid jailtime.
Why use TelexFree when we have Skype????? BTW, Skype has the similar service of being able to call from any phone, any phone! It is called Skype to Go, look into it.
No surprise. When DMG Grupo got closed in Colombia there were members protesting in the streets and some even tried a hunger strike, while chanting “Lo cree en Dios y David Murcia” (We believe in God and David Murcia).
When you believe in some sort of salvation it takes a lot to shock people out of that belief. The lack of trust in government (amount of money poured into stadium for World Cup and not enough trickled to the people) means people don’t believe in the government even though it’s technically separate from the justice system.
So if they are having troubles in Brazil, why are they ok to build here in the US?
Ympactus/Telexfree/Brazil is in lockdown. It has been enjoined by Court Order from receiving-distributing money or signing up new promoters.
On the other hand there has been no enforcement action against a company nominally known as Telexfree (USA) nor any finding that this US company s conducting business illegally. It therefore, can transact business, sign up affiliates, take and redistribute money in its own name.
Generally, under US law a corporate entity such as Telexfree/USA has the same rights as a real person. As such, it is assumed to be innocent unless proven guilty. It may conduct business so long as no action is taken against it.
I have read posts here that indicate that the back office at Ympactus/Telexfree/Brazil is being used to track US activities. While somewhat plausible it would seem to be a risky and reckless thing to do since Ympactus/Telexfree is enjoined from enrolling new members or accepting money from anyone, anywhere.
Therefore, in the absence of hard evidence to the contrary it seems more likely that the operations in the US are accounted for and tracked by someone other than Ympactus in Brazil and that the name Telexfree while familiar to people is just a marketing brand used to sell a reconfigured US opportunity.
That is not to say that Brazilian citizens can not recruit for or buy positions in Telexfree/USA. They can. They just can not do it through Ympactus/Telexfree/Brazil.
Telexfree.com is the official website for TelexFree Brazil, US, UK, Spain and all the other 188-202 countries around the World. People in Brazil didn’t join “ympactus.com”.
The reason why only Brazil has been shut down is probably the limited jurisdiction of the first injunction. It only ordered recruitment stop in Brazil, not in other countries.
The injunction wasn’t against the ENTITY itself but against the ACTIVITIES. The entity was only named as one of the defendants, along with the owners.
The order didn’t specify anything about that it only would be illegal to join Ympactus Comercial LTDA, Brazil, e.g. that any other company name or country of registration automatically would be excluded from the ban.
It specified its own geographical jurisdiction. State level Courts in Brazil don’t have any universal juridiction.
Civil trials isn’t about whether or not anyone is guilty, so you can safely assume all of the defendants are innocent.
It was up to the defendants themselves to prevent recruitment and transactions to/from people living in Brazil, for the period from June 18th to the Court had made a final order. And the defendants are trying to delay that order from being final.
I never said they did. They did not join telexfree.com either.
An injunction is against a legal person(s) and it prohibits that person from engaging in specific activities. Such an injunction is entered as an order styled, the State of ACRE vs. Ypactus/Telexfree/ Carlos Costa et al., not the State of Acre vs. signing up recruits (the activity)
This has been done. Ympactus/Telexfree/Brazil is no longer accepting/distributing money or signing up new recruits.
If you look you may find that Ympactus Comercial LTDA, Brazil, is the parent company of Telexfree which could be a dba fictitious name or a subsidiary. This stucture parallels the Rex Ventures LLC dba Zeek Rewards setup that you are already familiar with. Its typical.
Ympactus is responsible for the actions of Telexfree and the individuals Costa, Wenzler etc. are in control of the activities of both. This why they were all enjoined from engaging in the prohibited activities. It is impossible to hold activities responsible. You must hold people or legal entities responsible.
People here in the US did not join RexVenturesGroupLLC.com either but its now obvious they were doing business with Rex Ventures even if unaware of it. Same applies to people who unknowingly were doing business with Ympactus.
The dot com appelation is irrelevant. Its just a domain identifier on a website controlled (at least in Brazil) by Ympactus
They are not okay to build here in US. That is left in doubt (legal gray area). They simply assumed, and lead other people to assume, that it’s okay.
So far they assumed correctly.
You must see that comment in context with your own post. I simply tried to correct the idea that it was about the company itself rather than the activities, e.g. the “Innocent until proven guilty” idea or the idea that WHERE it is located makes a huge difference.
People living in Brazil can’t reasonably “assume” that TelexFree USA is more “innocent” than TelexFree Brazil, i.e. that the problem is WHERE the company is registered. It isn’t about joining a specific company, it’s about participating in the specific organized network marketing activities organized by the defendants.
The defendants are:
* Ympactus Comercial LTDA.
* Carlos Costa (owner)
* James Merrill (owner)
* Carlos Wanzeler (owner)
* Lyvia Wanzeler (wife of the owner)
The injunction was about assets freeze and recruitment stop, within the geographical area where the Court / other Brazilian courts have personal jurisdiction. It was for a limited time / until replaced by a permanent order.
A case will almost always be about some types of “activities”. An order will typically be directed towards people / legal entities controlled by people.
Its about both, but the injunction is lodged against specific parties who bear responsibility for compliance with the court orders.
I never suggested that they should. In fact the Brazilian injunction and news coverage surrounding it should serve notice to all Brazilian citizens and promoters that anything associated with Telexfree should be viewed with the highest suspicion no matter what country it operates in.
If so then it does not apply to the United States and whomever is using the name Telexfree name in the US is not “bypassing” the Brazilian Injunction. This, however is not to say that they are in compliance with US laws. That remains to be seen.
To clarify something …
Brazil has a law against “Financial Pyramids”, but it doesn’t have a law against “Joining companies that starts with YMPA”. Financial pyramids are so called “Organized activities”, but they don’t need to have a company structure or be registered as companies.
When you’re banning something, it’s typically about activities (e.g. joining, participating, organizing). And you can’t ban it if you don’t have any law against it, so banning “companies that starts with YMPACTUS” would be rather pointless.
The comment must be seen in context with your own, i.e. see what I tried to correct and deliver a better correction, rather than trying to correct my correction out of context.
Ympactus has not been banned. It has been enjoined from engaging in activities enumerated in the Order.
Well Ympactus ran afoul of those laws and it has been enjoined from continuing to do so.
Does anyone knows that TelexFree is promoting a “Extrabagansa” training conference in Orlando, Fl to be held November 1, and 2 at the cost of $200 for registratioin? I wonder if SEC has been alerted?
If anyone knows how to contact the proper authority. Please let me know 4 members of my family allready invested and are totally sold on TelexFree and are presuring me to invest and attend their extrabagansa meeting in Orlando Florida.
They probably won’t get back to you with any solid confirmation but you can always contact the SEC via their website.
If you’re not comfortable with the idea of investing in TelexFree I’d take that as a sign you probably shouldn’t.
Attorney of Telexfree company said that it is legal in USA, and it main produce is VOIP, and Direct Selling Associate, but why this company not show the DSA contraction?
Did Gerry Nehra actually state TelexFree was a member of the DSA? I don’t recall that.
Anyway I’d doubt the DSA would approve adding TelexFree as a member company, the business model (even with Nehra’s psuedo-compliance) is just a dressed up Ponzi.
You have to keep in mind this is the SAME GUY who also said Ad Surf Daily was NOT a Ponzi scheme (closed in 2008 by SEC) and Zeek Rewards is NOT a ponzi (closed in 2012 by SEC).
No, I am NOT making this up. Feel free to search “Nehra ASD” or “Nehra Zeek” and see if you find something on your own.
You can test how comfortable you feel using Nehra’s defense arguments in a discussion?
That’s the best way to test his arguments. Analyse them and make them become your OWN ideas, and use them actively in a discussion. If you seriously believe in the ideas he’s presenting, that shouldn’t be any problem.
Your statement about “Attorney of Telexfree company said …” clearly show that you don’t really believe in his ideas. You don’t believe ENOUGH in them to make them become your own, i.e. they don’t reflect the realities as you see them yourself. You don’t feel very comfortable making his ideas become your own.
That should tell you all you need to know about Gerald Nehra’s legal arguments. People prefer to refer to HIM rather than using the arguments actively in a discussion.
Most people KNOW his arguments will fail, e.g. if tested in court. The arguments are reflecting his client’s wants and needs rather than his own profession, and most people will instinctively know the difference. I don’t need to go into more details than that, i.e. I don’t need to “drown” people in counter arguments before they’re asking for it themselves.
He probably said that HE is a member of DSA. 🙂
“Member of DSA” doesn’t tell anything about the legality of a company. It only tells that a company is member of the Direct Selling Association, and normally that the company has accepted a “Code of Conduct” that is poorly enforced.
“Code of Conduct” is how the members themselves feel things should work, but it’s typically about something not regulated by any laws.
I have no idea too of the company, but I used to searching with http://www.dsa.org to find about DSA contraction of Telexfree alway not found.
If the company have real it will show the DSA. Can anyone tell me about the website to find if have.
Great discussion. The last comment was in November. Does anybody have any update on is going with this company now? How is this thing in Brazil? I see them sponsoring a soccer team, what’s with that? Someone told me that they are still selling the VOIP in Brazil. Any truth to that?
I am a a foreigner, I personally use the VOIP to call, Although, I had to ask to buy it. Lol. Any updates from you guys?
Start reading… https://behindmlm.com/category/companies/telexfree/
List of articles:
You can find the same list by …
scroll to the top of the article
click on “TelexFree” (right under the headline)
You will also find the same list in the menus on the right side, “Companies”.