Brazilian feds launch “Operation Orion” against TelexFree
Less than 24 hours after indictments were handed down against owners Carlos Wanzeler and James Merrill, Brazilian federal police have launched a new operation against TelexFree.
Codenamed operation Orion, supposedly because the constellation Orion aligns with “the three largest pyramids of the Giza pyramid complex” in Egypt (Wikipedia), the operation has thus far resulted in nine search warrants.
Issued by the 1st Federal Criminal Court in the Brazilian state of Vitória in the Brazilian state of Espírito Santo, the warrants were executed on properties linked to Ympactus.
Formally Ympactus International, the company serves as a money laundering front for TelexFree’s Brazilian operations.
In addition to the warrants, the court also
prohibited Ympactus’ owners from leaving the country under penalty of imprisonment, (ordered the) monthly attendance (of the owners) at the Federal Court, as well as the seizing of real estate as a precautionary measure, (along with) the freezing of bank accounts and the suspension of economic activities Telexfree in Brazil.
In addition, the Federal Court authorized the participation of tax auditors (from the) Internal Revenue Service of Brazil (as part of an) overt phase of the operation.
One TelexFree owner, James Merrill, is currently under house arrest in the US and is facing charges in both a civil and criminal case against him. The other two, Carlos Costa (a defacto silent partner through Ympactus) and Carlos Wanzeler, are currently both residing in Espírito Santo.
Costa is currently trying to run for office in the hope he will escape criminal charges and Wanzeler is hiding from US authorities. Wanzeler is a wanted fugitive in the US, with prosecutors issuing a federal arrest warrant against him yesterday.
I believe Costa and Wanzeler were, at least on paper, the legal owners of Ympactus.
Under Operation Orion and as owners of Ympactus, Wanzeler and Costa may have to
answer for crimes referred to in Articles 7 and 16 of Law 7492/86, which defines crimes against the national financial system, besides the crime under Article 2, Paragraph IX of Law 1.521/51, which defines crimes and misdemeanors against the economy.
Currently Operation Orion has 50 federal police officers and 18 auditors from the IRS working the case.
I’m not too sure what there might be left to find given that by all accounts Costa shut down Ympactus’ offices months ago, but they might find something yet. As for freezing bank accounts and suspending the activities of TelexFree in Brazil, that seems wholly redundant.
The introduction of tax auditors might signal irregularities found by Ernst & Young, who had been charged to audit Ympactus as part of the Acre case.
Ernst & Young were due to hand in their audit report but, citing the “complexity” of TelexFree’s business operations, requested an extension. Whether or not Ernst & Young are cooperating or working with the IRS though is unclear.
Meanwhile, given the timing of Operation Orion, I’m having a hard time believing this is anything but the direct co-operation of US and Brazilian regulators.
We haven’t heard anything for a while now on the criminal side of things in Brazil. And then all of a sudden early morning the day after Merrill and Wanzeler are indicted for fraud and conspiracy in the US, Brazilian federal police launch their own crackdown operation?
As I understand it Ympactus/TelexFree has been under criminal investigation in Brazil for some time now. With this latest action appearing to coincide with the indictments in the US.
That noose is getting tighter, can you feel it Mr. Wanzeler?
And pray that Carlos Costa is using towels, not tissues, to keep himself dry. Lord knows there aren’t enough trees in the Amazon to keep that man from sweating at the best of times.
Update 24th July 2014 – Globo are reporting that
more information will be released by the Federal Police still on the morning of Thursday (24).
in Brazil who has not dinheirio gets stuck. I have the impression that things were rushed due to the audacity of candidacy carlos costa to Congress Federal.
They’re measures that should have been taken long ago. perhaps also about ernst young, with the advancement in the U.S. too.
(Ozedit: Please quote something of relevance rather than just leave a link)
its with me?
No you’re fine. Faraó just published a link without any supporting text.
Sorry Oz, a statement on the operation of the IRS:
No worries, just makes it easier for readers to know what they’re clicking on before they click it.
Edit: Lol, the Brazilian federal police acknowledged the Orion/pyramids naming. Can’t say they don’t have a sense of humor!
It’s the same information you have in the article, but from an official source Policia Federale.
Yet again they’ve found people working at Ympactus’ office. To Brazilian feds they’ve said they were not working there… Really? Two times now?
I wonder whether miss Angry-Blondie treated the feds as she treated Globo TV’s Fantastico news crew when they busted them the first time (“Hey, get the f*ck off!!!”).
prosecutor requested the arrest of key players, but justice denied. Public Prosecutor will not appeal now, judging that precautionary measures are enough
check this ad out….what a load of hogwash…. continuously trying to take advantage of zombies!
I mean I can naively fall into the scam once….but if I have screwed an entire downline of innocent people after the ponzi/pyramid goes bust…. am I going to do it again??
You would think that there are just so many zombies out there that you can swindle.
Thanks Oz for your support in teaching a whole lot of us on how to understand this underworld of internet scamming.
The Orion Correlation Theory holds that Telexfree is related to the Great Pyramids of Egypt. Carlos Costa claims to be a Pharaoh.
Carlos Costa: Codename: The Pharaoh.
Video: “meets Federal Police warrants on addresses in ES Telexfree”
In Globo TV news, one of the Brazilian feds said Ympactus moved (hid) their accounting records to another office, which address was unknown until last week.
Trying to conceal the data you never wanted the feds to take a look at, Mr. Costa? No more paper to wave in you Youtubes videos now?
I thought TelexFree did not exist as a corporate entity in Brazil. I thought the name was Ympactus over there.
I wonder if they have anything to do with the new “Brazilian” company (and that’s a big stretch of that word) that’s coming up. Seems like ex TelexFree members are latching onto this one now.
If you need the name I’ll post it but I’m not interested in promoting it.
Ympactus’ “trading name”, as registered in Brazil, is “Telexfree Inc”. They’ve certainly used that to fool people into thinking they were an “international” company.
And besides that, more than one judge has acknowledge the two companies share the same owners (or at least Wanzeler, as of now) and are basically the same company with two different and related names.
Structurally, Ympactus seems to be a Brazilian company that paid fees to Telexfree (the US company) and in return obtained management services, the use of the name, logo etc.
Since management/ownership is shared between the two companies, it makes them alter egos of one another and that generally means that the distinction between the two companies is apparent rather than real.
Boston Globe have published a statement from Wanzeler’s lawyer:
If there is something that i’m really proud of my country is how cool names our Fed’s put in those operations. It’s like, 50% of the time in a operation is designed to find the coolest name for it.
I guess you guys will love this:
So game over then?
No false audit reports, no bullshit Carlos Costa printouts.
The company has a demonstrated history of fraud when it comes to reporting to authorities in the US, with independent information from the US investigation (seized by the FBI and HSI), that should spell the end of Costa’s nonsense.
I think the Brazilian regulators are starting to get somewhere…
Even the fines Costa waved so proudly in ona of his videos, declaring they were a proof of victory, were not paid… LOL.
According to these guys, Costa’s “get out jail free” run for politics has an August 5th deadline to be approved.
What’s the probability of individuals under criminal investigation having a Federal Deputy application approved?
According to Brazilian laws, a person can only be prevented from running for a public position when he or she has been previously convicted.
In my opinion, they should let Costa run for congress. Otherwise he will use the denial in his favor, telling everyone he’s a victim of the system, that powerful people are afraid and are persecuting him and blah blah blah…
What happens if he’s running and then the criminal case get resolved (with inevitable jail time)? Does he get removed from office?
I guess if he’s found guilty after being elected but before taking the office, he would not be allowed to do the last.
But after he took the office… that’s when things get murky. I suppose he could have his term of office revoked, but that could take some time, unless the Supreme Court gets involved. A mere civil case would not affect a congressman for years to come.
Hold up Operation Orion is a criminal investigation is it not?
Yep, it is. My mistake to use the wrong expression. when describing the case.
Anyway, it sums up to: it’s really, really hard to touch a congressman after he’s in his office.
But, as we know, people who gets involved in those schemes love talking over the internet but rarely do something in real life. So we can expect Mr. Costa to fail miserably in trying to get his dirty sweaty flapping hands in the parliamentary immunity .
More news about Carlos Costa! Now he can get 10 years in JAIL!!!!
Líderes da Telexfree podem ficar 10 anos na cadeira
Investigação mira em divulgadores da Telexfree
Provas Coletadas nos Estados Unidos serão usadas no Brasil
And more!!! Carlos Costa will answer all this things. Probably he will say “I believe in god” and “I will not go out of the country” (Even because he can’t do it now).
He lie one more time. He say that he SEND all this book to the judge. Am I correct? Lol, all the time this book stay in your home.. Bad things carlos. (Obvious, send this book is a so stupid thing. A database is very easy way to extract the information)
Lol, Costa’s put up a “video coming soon” post on the TelexFree Facebook page.
This should be good…
I noticed a lot of the comments are sarcastic responses predicting he’s just going to use the video to ask for votes. Are the faithful finally waking up?
I guess if there is cooperation between Brazil and the US in terms of the investigation into Ympactus/TF, then there will be probably also be cooperation in the disbursement of ill gotten gains by the Trustee if and when the time comes.
I’m not sure how that will affect US based affiliates but there is a possibility that less money will be salvaged by those in the US if recovered funds are shared with people in other countries.
In Brazil research will now behind the advisers who earned more than $ 40,000 .
I think we should all seek that won anything above that invested
new video carlos costa . today 25/07
And here’s a rough translation of CC latest Youtube’s video:
The end. Probably not… Next week we shall have another amazing footage to watch.
Basically, he’s talking about HIS FEELINGS rather than facts.
When did Carlos Costa use facts? He always talks sh*t.
Oh, and there’s this too: according to what’s being published all over Brazilian MLM blogs and FB walls, RFB (Brazilian IRS) is notifying a lot of “investors” from TelexFree/Ympactus and BBOM due to incorrect or missing data on their IRS forms.
By “notifying” they mean: “Hey, why won’t you come over to our office and explain this and that. Don’t forget to bring evidences. Yours truly, the IRS”.
I predict a lot of people losing sleep over that matter…
Net winners that filed those forms will not show up for sure!
About voips actives Brazil. First numbers here.
Diego – Thanks for the translation! It appears he ran for office just so he could claim the law enforcement/legal actions were political.
That reminds me of my former upline from another MLM. He loved telling a story in front of thousands of people that went something like this:
He worked as a care-flight helicopter pilot for a hospital in Jacksonville, Florida. He had previously flown helicopters in the Army in Vietnam (supposedly) and offshore along the Gulf of Mexico coast.
People at the hospital knew he was in the MLM, so after he was making the big money and right before he left, they would ask him how that “pyramid thing” was coming along, and his response was, “It’s built. And I’m the Pharaoh.”
Then after he “retired” from the helicopter pilot job, he would drive his ocean going cigarette boat up the hospital, which was on the St. John’s River, and wave to the people inside. It’s easy to imagine how every single person in the audience would think about how they would leave their job….
The point being everything that you think is poking fun of them, they actually USE to their advantages.
Same with the saturation question. The typical way to address that is to say that the MLM has been trying to saturate for 30, 40, 50, etc., years, and they haven’t done it yet.
As you know I was referring to a codename that authorities might use to identify the ringleader of a pyramid scheme. As you point out humor is an effective method of deflecting criticism.
In Brazil, investigation from Police and prosecutors everytime have a name. This nickname is not a joke, it is actually a concept for operation.
Two months ago, in the Espírito Santo, for example, there was Operation Sanguinello. The name was chosen to thwart a scheme of tax fraud in the drinks and wine industry.
Do you ask me: why that name? The reason is as follows: Sanguinello is a blood orange or blood-orange is a variety of orange with crimson, blood-colored flesh.
The fruit is smaller than an average orange, its bark is usually red. In Brazil, people who lend their name to be used in shell companies are called “Oranges”.
In my opinion, Brazilian authorities cannot and should not in good conscience allow Wazeler and Costa to live the good life, with all the money they ammassed from investors, to simply get away with the crimes (money laudering and investment fraud) they have committed.
I think the authorities are aware that Wanzeler is in Brazil with money that doesn’t belong to him and that he may have used friends and local businesses (Disk a vontade?) to transfer money?
Fact is, he wouldn’t have been able to hire a top notch attorney in Brazil to keep him out of jail unless he has money hidden there or getting the money from somebody, right?
He may not have the money in his possession. He may have trusted the money to someone else.
Carlos Costa is an idiot and a manipulator. An idiot because he keeps promoting the scheme on those stupid Plantao Videos and keeps living in denial. At least now he is a target of investigations as well. Before it was almost like he was immune to any legal process. Why?
Then you have all the other cohorts in the U.S., top promoters that put money away, probably millions in commissions and NOT ONE has been convicted of any crime? B.S.
This is one of those schemes where,
1. The orquestrators should be put in jail.
2. The promotors that received millions in commission should be fully investigated, return the money and be accused of participating in a pyramid scheme.
3. Wanzeler and Costa should share a cell together and return the money they have taken and/or hidden from authroties
4. Put everyone found guilty behind bars and close this case.
based on everything that has been reported in the press, representatives, prosecutors, federal revenue seems there was a task force to end this pyramid, finally.
I think the trigger was the boldness of coastline carlos apply for the National Congress as a federal deputy. It would be the greatest shame for the country and its institutions in the United States see owners being arrested, prosecuted while in Brazil Mor pharaoh be promoted to congressman post.
There is certainly a cooperation between USA and Brazil. The judge accepted the Acre (or will accept) attach evidence generated in the American process in Brazil.
I think the prosecution will burst very soon and even a conviction at first instance before the election (October 5).
As we say here in Brazil, where there’s more to escape or deny: “One day the house falls.” It’s time.
Hopefully with possession of all the real accounts of the company is to reach beyond what they earned and invested they are processed and charged to return the illegally gained.
Totally second that!
In the video he is so sad because Federals taken cars. Now he needs to walk, and is complain about that. Now he can feels how zoombies are…
I thought they took two of his cars a while back to make good an affiliate who filed a suit against him? How many cars does Costa have??
The difference is Costas *thinks* he’s clever, but a really clever scammer would never be so public. The really master criminals are like Moriarty; always in the shadows.
Costas’s like Kevin Trudeau, a narcissistic personality, likes to hear himself talk, thinking that he can outsmart the law, until the law finally had enough.
He’s like Brazil’s Faith Sloan.
boom, Ponzi slam!
I was looking for this picture for a while and I finally found it… Thanks to the cosplayers at San Diego Comic-Con
I thought that too but, after latest events, I think the first order was just to prevent him from selling/transferring those cars. The last order was to actually apprehend them.
I’m pretty sure if his student-only daughter could lend him $ 700,000, she can buy daddy a fancy brand new car.
Mikaella Campos (gazetaonline.globo) has posted 2 long article-sized comments about Operation Orion / other related information on patrickpretty.com.
I would be floored if the Brazilian justice actually worked that fast and handed a conviction before Oct 5.
I doubt this jerkoff is walking anywhere yet, but hopefully he will be one day- like walking from the prison cell to the mess hall and to the courtyard and back for the next 15 years or so.
Mikaella is in the eye of the hurricane. doing excellent work. I read the material in the native language (Portuguese) and is complete. if the google translation was good for you, you will understand exactly what happened here
Hello, M Norway. It would be only a text, but the first is with an error. So I did a second publication. If Oz allow, I put here the summary I did to Patrick.
(The Telexfree bankruptcy case)
Doc 372 “Endorsed order retaining Kurtzman Carson Consultants, LLC as claims and noticing agent”. Darr has negotiated terms and conditions substantially more favorable to the Estate than KCC’s initial agreement with Telexfree.
In short, Darr has negotiated a reduced price for the whole agreement, including retroactively back to April. Objection date is set to July 30 (Wednesday).
KCC has actually done a useful job making the documents available. I have more doubt about some of the others. 🙂
Anybody still think this is going to be dismissed from bankruptcy?
How ’bout you Thom?
I posted the link to let Oz (and others) look at it. If you want to post it in a comment then I can give the same answer as Patrick did = “It’s good to know A Gazeta is on the story. Post what you’d like” (Oz will find out how to use it).
It looks like more subpoena requests filed by the Trustee. This time Darr is requesting permission to obtain documents from a telecom company name Ciao.
He wants all documents that involves not only Wanzeler and Merrill but Carlos Costa as well.
sua matéria aqui tambem
your story here too
I had a few request to review Ciao but knocked them back due to the lack of English information available.
Hardly surprising that TelexFree and its owners used it to launder money. Wanzeler, Costa, Merrill and Labriola’s funds had to have been channeled somewhere.
Guess we’ll have to see how far the rabbit hole goes.
Of note is that this latest development has come about due to ‘recent interviews with former consultants and employees of’ TelexFree.
Looks like those subpoena requests are starting to pay off.
Ciao was apparently bought by another company, Specialty Contractors Inc., immediately after TelexFree’s bankruptcy, around April 25.
Ciao Telecom Inc. = VOIP service, internet TV and other related services, owned by Eugenio Santos.
* Market: Brazil and USA, and the world in general.
Specialty Contractors Inc. = shell company with some random customers, hardly any revenue at all. I checked some quarterly reports, and I found 3 customers mentioned in one of them.
Ciao (Ciao Group Inc., Ciao Holding Inc., Ciao Telecom Inc.) was paid for with new shares in Specialty Contractors Inc., which means in reality it was Ciao which bought a worthless company (not the other way around).
James Merrill is scheduled for an arraignment hearing tomorrow at 2PM. It could prove interesting as Mr. Merrill now has 8 more felony counts against him than he did when he was originally granted bail. – ASD Updates
Interesting. A businessman in Dominican Republic is funding a bunch of lawyers to provide free service to TelexFree victims.
I am not going to try and unravel this, but there’s a fair chance this transaction was a violation of the Consent Order.
In Brazil. + pain to head
I didn’t try to point out anything like that, it was simply about some basic info about CIAO from search results.
Darr’s “rule 2004 examination” is some type of “fishing expedition”. He only know that there were some INTENTIONS about investing in CIAO Telecom, but he has obviously received enough information to find it necessary to examine.
CIAO’s own information is relatively vague. From the PDF:
If CIAO has some substantial real business activity, some of the external consultants (e.g. Babener, Sheffield Group) may have recommended to buy the whole company as a defense strategy = “simply add more retail activity by buying a company which has exactly that”.
The information available is too vague to be interpreted.
* Darr’s examination is a “fishing expedition”, looking for POTENTIAL business relations or investments.
* The change in ownership may point in the direction that it can have been related to TelexFree’s bankruptcy filings. It may indicate a business relation or investment, but only vaguely.
Specialty Contractors Inc was what most people will see as a worthless company with hardly any business activity (I found 3 customers in one of its quarterly reports, most other reports only showed expenses).
Ciao Telecom Inc was rather vague about its business activities, what you can expect from companies PRETENDING to be bigger than they really are. It can seem like it has been involved in “pump and dump” activities = it can look nice when CIAO is added as a partner in a business relationship, it can make investors believe in some profits.
Serves him right for not recruiting other people into the scam!
No you didn’t. It occurred to me…. which is why I mentioned it…. and you didn’t.
It would be nice to be able to get court transcripts or video/audio recordings of court proceedings occurring in the MA courts and also action within other courtrooms dealing with TF.
I remember how cool it was when the case first went to a hearing in the NV court and there was a transcript of a live audio feed and blog…
But since then I haven’t seen any transcripts of proceedings from in the courtroom… only court documents and orders from the ASD website.
Transcripts are available in two or three days for purchase, but cost a small fortune. Attorneys buy them and bill their clients….otherwise they become available to the general public 90 days after the hearing, but only at public computers in the Court house.
Video/audio are generally OUT without express permission of the court. The hearing in NV that you speak of was basically bootlegged by a person in the courtroom typing their impressions into a wi fi connected laptop.
Documents cost. The BK estate is paying KCC to carry them, otherwise we would have to pay to view them on the Pacer system (federal courts only).
Don at asdupdates.com shares our interest and downloads many of the documents. You may want to visit his site to view his Federal documents. If so please make a donation to defray his costs.
State courts may or may not have an online publishing presence. Most don’t and it expensive and slow to get documents from them.
Mikaella Campos may potentially be interested in some additions to that one. I’m not familiar with Brazilian tax laws, but that tax method would have been incorrect in the USA and in Norway (the 2 tax systems I’m relatively familiar with, in terms of the logic used rather than the details).
If the tax logic used is incorrect, it will only cause trouble, both for the tax payers and for the tax authorities. I may add some additional logic to it later.
Internal payouts to a back office don’t involve any monetary transactions = it should normally not be taxable as income. It may be SEEN as taxable income by tax authorities if they don’t separate between monetary transactions and virtual ones = if they don’t analyse it properly.
It CAN be seen like this (incorrectly):
* TelexFree did pay out “rewards” to the back office each week, e.g. $20 per week per AdCentral or recruitment based commissions. The currency sign in front of the amount may make it look like a real transaction of money.
* People did have the option to withdraw those payouts as cash, via e-Wallet accounts to their external bank accounts, in a “seamless system” where transactions from back office to e-Wallets looked similar to monetary transactions.
* People could also use the payouts to buy products or services internally. The internal payouts had a function similar to monetary ones, e.g. people could use them to pay for goods or services.
A tax authority can easily come to the conclusion that the payouts were constructively received during the tax year. They may easily come to that conclusion, but that doesn’t mean it’s the correct conclusion. It will fail logical tests.
* It can also be SEEN as the contracts themselves had some value, e.g. that people can be taxed for what they POTENTIALLY could have earned through those contracts, e.g. that people OWNED valuable contracts that almost certainly guaranteed them some income.
Tax authorities will need to see it like this (correctly):
* A back office is not like a bank account = it doesn’t hold any money. It will be used for temporary storage of “promises about payments”. A payout to a back office will not involve any monetary transactions = it should most likely not be taxable. It may feel like a real transaction and it may look like one, but a real transaction will involve transactions of money between accounts.
* For a promise to be worth something, it will need to be backed up by liabilities or reserves intended to keep the promise. Empty promises are usually not worth anything.
* The back office held empty promises, TelexFree would not have been able to keep its promises to all tax payers. It would have needed to be able to keep its promises to ALL tax payers. “It could have kept its promises to SOME tax payers” will be hypothetical, it’s either about ALL or NONE.
* TelexFree did actually keep its promises to SOME promoters, the ones who were able to WITHDRAW funds via e-Wallets to external accounts (or other payment methods). Those payouts are clearly taxable, but the internal payouts were only empty promises.
* The investments in AdCentrals were not “valuable investments”. They were part of a fraud rather than part of an investment.
I can probably add some logical elements here, e.g. explaining WHY payouts to a back office are different from real monetary transactions.
It’s a big problem when investors are being fooled by payouts to back offices. It doesn’t make it better if the tax authorities are being fooled to.
Wonder what the connection to Ciao was. Santos is a common enough surname among South Americans (or even Filipinos).
My skeptical mind kept going back to Ympactus in Brazil buying up Voxbras and claimed they’re going legit. Can’t seem to remember what happened to that? The only one who got rich was the owners of Voxbras.
Wonder if we’re looking at a similar situation here?
“seamless system” = One of the most ridiculous and costly payment processing transactions that can occur in modern day internet
– You could only withdraw on Tuesday (at certain times?)
– It took a while (minimum 2 weeks) to finally see the money in your bank account
– There were all sorts of inflated fees. And that’s for people in the US doing a normal non-expedited transaction to a well known bank. If you were doing anything more than than like an international transaction then the fees were even more riciculous
Of course, some of this was because of TelexFree’s policies, but, I have to say that E-Wallet sure sucked ass. I hope they and all other payment processors affiliated with TF end up having to pay back everything they made plus fines.
My guess, based on the timing of the Motion for a “rule 2004 examination”, is that some documents involving Ciao Telecom Inc. popped up from some of the other professionals (e.g. Babener, Sheffield Group, etc.).
I also suggested that they may have suggested it as a solution. “If you have very little retail sale, simply buy a small company that has some”.
The problem here is that CIAO seems to pretend to be bigger than it really is. It’s extremely vague about details, it only has a front that looks nice for investors (but there isn’t much activity among investors either). It has been used indirectly to pump up share prices for other companies.
August 2013 press release:
October 2013 press release:
February 2012 press release:
CIAO seems to be in the market for press releases rather than the market for anything else.
I do not know how, but we’re talking about two different reports created from information provided by the company.
The company sent a report to the publishers and one for the government. Tax evasion by the company and not by the publishers, apparently. there is more fines on the money locked
That was put under how it incorrectly could be seen by tax authorities. It CAN be seen as a normal part of a real payment system, where the tax payer COULD have withdrawn the payouts as cash.
Money paid to an external bank account will involve a real monetary transaction, from the company’s account to the promoter’s account
Money paid to an e-Wallet will normally involve a real monetary transaction, but only between the company’s OWN accounts. But the money is actually AVAILABLE to the tax payer there, it can be withdrawn at any time. The tax payer can transfer the money DIRECTLY to his own bank account (or use it via a prepaid card).
Payouts to a back office cannot be withdrawn DIRECTLY to an external bank account. It cannot be used to pay any external bills. It cannot be used to purchase goods or services outside the system. It’s simply not about real money.
* Payouts to a back office = not taxable. They’re “phantom payouts”, payments in promises rather than payments in cash.
* Payouts to an e-Wallet = taxable, unless the accounts have been frozen in the same tax year before the amount could be withdrawn.
* Withdrawals of any type = taxable, as long as the money HAVE BEEN received or COULD HAVE BEEN received during the tax year.
Incorrect tax logic will only cause problems. I believe the Brazilian tax authorities have been fooled by the same system that fooled the investors.
Yes I can understand how there can be confusion. The whole system I think was set up to make people think that there was real money in the back office that was their income. Naturally, government officials can also be “fooled” in the same way if they are not careful.
Many people are still holding out false hope that the amount in the back office will be returned to them some day so that they can get their initial investment back plus any “earned” profits.
I believe that may have happened here. The authorities in Brazil seems to generally be unfamiliar with how to handle Ponzi schemes.
I looked at Mikaella’s story, or I actually looked at Elpidio’s version of it (the tax payer’s version). It’s relatively similar to how Zeek Rewards fraudulently reported taxes for the tax year 2011.
* The tax payer received R$123,000 as “internal payouts”
* He managed to withdraw R$30,000 as real monetary payouts
* The company reported R$140,000 as taxable income
Neither the reported payouts nor the internal payouts are about real monetary transactions. The tax logic applied is incorrect, they can’t directly apply pyramid scheme tax logic to a Ponzi scheme.
Great “analysis” and “translation” of Carlos Costa’s last video:
Most South American countries are not familiar with “modern” Ponzi schemes that are often disguised as something else, at least initially. The Colombian 2008 pyramid crisis was a great example, but the lesson did not seem to have passed onto its neighbors.
News from Brazil: Acre’s Judge Thais Khalil has rejected the request (from Ympactus) to not include documents from SEC into Brazil’s case.
The complete order can be read here (in Brazilian Portuguese): http://diario.tjac.jus.br/display.php?Diario=3217&Secao=374
(Continued from post #84 (#77, #80, #82 and #84), about the tax claim).
This post will contain a lot of detailed interpretation. It’s about some arguments backing up my main conclusion.
A problem in this case is that TelexFree / Ympactus had multiple components, and “pyramid scheme” only was a secondary component (if we use normal logic for how to separate something into PRIMARY or SECONDARY components).
A primary component is usually the CORE of a business, the CORE of a crime, the CORE of a computer program (e.g. “Windows 8” is defined to be an “Operating System” rather than a “program”, based on the logic that it has an OS as a core component = many small programs working together communicating with the computer itself. The rest of “Windows 8” is built up around that core).
In TelexFree, the CORE component was not a pyramid scheme. Pyramid schemes are normally clearly defined in laws, e.g. traditional pyramid schemes can be defined in Lottery Laws or Gambling Laws, promotional pyramid schemes are normally defined in Commercial Laws, and they both can be defined in Tax Laws (but there they may have missed the exact definitions, because Tax Laws normally have a different focus).
The CORE of TelexFree / Ympactus was actually a fraudulent investment scheme / fraudulent contracts about “work from home”. It had virtual payouts, and the pyramid scheme component used the same system for virtual payouts as the core.
Money in pyramid schemes are usually not “pooled”, the payouts can be traced back to individual investors. There’s a direct relation between the recruitment and the payouts, i.e. people will ONLY receive money from people they have recruited directly or indirectly.
There’s an exeption from that in “forced matrices / spillovers” types of pyramid schemes, but that exeption isn’t very relevant in this case.
The $20 weekly payout derived from a “pool of money”, i.e. payouts can’t be traced back to money coming in from a specific investor through recruitment (the factor that is the CORE of a pyramid scheme).
THE CORE OF TAX LAWS
The core of tax laws is normally not about the specific tax rules. Normally it’s about rules identifying WHOM (the authorities, the tax payers), WHAT (jurisdiction, powers, duties), HOW (procedures, doctrines), etc.
A tax payer may have a valid defense against a tax claim if the tax authorities have misinterpreted the realities in a case. They have most likely misinterpreted the realities here, they have most likely accepted the definitions used by other authorities rather than analysing it themselves (what they normally are expected to do, as a part of the core work, tax rules can often be different from other rules e.g. in that they solely deal with whether or not something is taxable).
Tax authorities are independenly responsible for analysing the facts in the case. They can’t use the logic “other agencies have identified it as a pyramid scheme, so we can identify it like that too (and apply that type of rules to it)”.
In this case, they have most likely identified the internal transactions incorrectly, e.g. as real transactions of money rather than as virtual transactions to a back office. They have most likely failed to apply proper tests for “Does the data we have collected really reflect the reality as it really is?”
Do you really believe that Ernst & Young, a professional CPA firm. and the entire accounting apparatus of the Brazilian government can’t tell the difference…. but you can?
Posts #77, #80, #82, #84 and #88 were simply about me THINKING, about me TESTING some different arguments and counter arguments, testing how able I will be to meet counter arguments e.g. from tax authorities.
My MAIN conclusion, based on Elpidio’s version of the story and my own knowledge about TelexFree and Ympactus, is that the tax authorities most likely have misinterpreted the realities of the case, e.g. I don’t believe they have verified the source.
If they collect information from a fraudulent company, that information will most likely be fraudulent too. It doesn’t matter how “correct” it looks or how correctly the authorities have analysed it. The source will still be a “tainted source”.
TelexFree and Ympactus were organized like this for transactions:
A: Real transactions of money from newly recruited promoters to one of two destinations.
1. Directly to the recruiting sponsor’s bank account (or cash)
1a. To indirect sponsor’s bank account (or cash)
2. Directly to TelexFree’s (Ympactus’) bank accounts (both of them probably used many different solutions for transactions)
The real transactions ended up there. The rest of the system was about “internal transactions”, about virtual transactions of “monopoly money” or “empty promises” between promoters and TelexFree, between different promoters or internally between different accounts belonging to the same promoter.
B: The internal system, where people could receive weekly payouts to the back office. They could also pay bills, e.g. pay for the monthly VOIP subscription, pay for additional subscriptions to qualify for binary commissions, pay for additional AdCentrals or sub accounts (the $50 fee). They could also transfer “internal funds” between accounts.
That part didn’t involve any monetary transactions. “Internal funds” are more similar to monopoly money = a payment method that ONLY is valid inside a specific game, where the “currency” used have no real value in itself (it will not be accepted as a currency outside the game).
When the game ends, it will look like a huge amount of money simply have “disappeared into thin air” (or in this case, it may look like the promoters have received huge payouts).
C: Withdrawals. The money is still located under point A, i.e. TelexFree used money coming in from new promoters to pay out withdrawal requests from old ones.
THE POTENTIAL TAX FRAUD
The “internal system” mentioned under point B doesn’t require any monetary transactions, it will only require adjustments of some “internal balances” in a database. It will look relatively similar to real transactions of money for most people, e.g. many of the income claims on the internet were partially based on those internal transactions.
The potential tax fraud here is located under point A.1 and A.1.a. It will require some detailed explanations, but it was generally about that promoters received real money from people they recruited, in exchange for “fully paid accounts / AdCentrals” from the company, paid for with worthless “internal funds” from the recruiting sponsor’s back office.
I used “potential tax fraud” because people also used it as a “normal payment method”. It was faster and less expensive to pay directly to the recruiting sponsor, and let the recruiting sponsor use the internal funds to pay for the AdCentrals.
I will be able to back up this information with reliable sources, e.g. I can point to a court document where special agent John S. Soares (Homeland Security) partly have looked at the internal system and have tried to identify it.
I have focused on quite different factors than him, i.e. he focused on the amounts reported by TelexFree to authorities during the investigation, while I have focused on the system as it was used by promoters.
Criminal case Doc-2-1.pdf
Affidavit by John S. Soares, paragraphs 57 and 58
Documents, Telexfree criminal case can be found here:
I didn’t draw any conclusions like that? AFAIK, Ernst & Young asked for additional time, and their audit is related to the Acre court case.
Experts can be fooled just as easy as anyone else. In this case, it looks like they have found exactly what they were looking for, made ready for them to find.
You know perfectly well that I will ignore people’s status as “experts / non experts” and focus on the case itself. I will only make some changes to my own communication methods, e.g. offer different types of sources than I normally would have done to a general audience.
The tax claims seems to be based on the information from Ympactus itself, received by the tax payers on April 28 (2 days before the deadline for tax returns, delayed 2 months from the normal February 28 deadline).
Google translation of a part of the story:
Link to that story (in Portuguese) can be found in post #71.
Feds seek assets in TelexFree case:
Interesting comments from the article:
Sounds like mostly Wanzeler holdings, from that description.
No they can’t. If they could they would not be experts, they would be average dumbasses.
Please stop calling M_Norway average.
I fear I may be trolling the muddy waters… But experts *can* be fooled, quite often in fact.
E&Y is a pretty big and famous accounting firm (so famous, they are often cited by some alleged scams as “We got some/nominated for some award from them, we can’t possibly be a scam!”)
But which division of E&Y is doing the accounting? Is it the forensic accounting fraud investigation department?
The original statement wasn’t whether it is absolutely impossible to fool experts, the statement was “Experts can be fooled just as easy as anyone else.”
Also, accounting firms are famous for not catching scams, because that isn’t their job. Their job is to look for accounting errors, not scams.
Yes, “experts can be fooled,” “but not “as easily as anyone else.”
This should not need any further explanation.
Come of think of it, I think Ms. Coenen of Sequence Inc has an article on this exact topic:
That article might cause some “cognitive dissonance”, i.e. it’s in conflict with someone’s belief system. 🙂
The initial question was about whether or not experts could be fooled just as easy as anyone else. The types of experts in question were accountants / auditors / IRS investigators (in Brazil).
An argument supporting that they can be fooled just as easy as anyone else is that experts typically will have a specific “field of expertise”, an identifiable way to see things, identifiable ideas and work procedures. It should normally be much easier for someone knowledgeable enough to design illusions specifically for that purpose.
An arguments against that is that “experts have a gift from God, the divine factor that separates them from ordinary people and will help them detect attempts to cheat them”. In other words, “expertise is something we believe in, and experts are the physical manifestations of that, the people practising expertise”.
So after all is said and done, how much longer until the victims can put in a claim and get some money back ?
Official document “Operation Orion”
100+ pages! Thank F. I’m not going to be translating it :).
Oh… There’s so many good parts on that document that it is almost worth the trouble. 🙂
Here’s an example:
I guess that explains how a 20-yo student would be able to lend daddy R$ 1,500,000…
These internal transactions are especially prone to fraud.
It is well known that many new TF promoters joined by paying their upline in cash or by bank transfer. This was opposed to paying TF directly via credit card or by some other monetary transaction.
The upline would then use credits in their account to start the new promoters account that either came from placing ads/binary commissions/other known “payments” from TF for their recruiting efforts OR from transfer of credits from their own upline or someone with a lot of credits in exchange for cash or a bank transfer.
I remember when I joined by bank transfer of funds to my direct upline, she told me how credits used to secure memberships for new recruits were so difficult to come by and she was willing to “buy” any credits that I earned in the future. She even sounded somewhat upset when I withdrew some money from TF instead of selling the credits to her.
At any rate, the point I’m trying to make is that I don’t think that the money I transferred to my upline’s bank account in exchange for a promoter position ultimately made it’s way to TF’s bank account.
Once, I transferred money to my upline’s bank account, everything in regards to my enrollment was handled via internal credit transactions.
In my eyes, it is entirely possible that credits were being generated by TF or high level promoter out of thin air or were being brought wholesale (ex. at half off) by high level promoters and then these credits were filtered down the pipeline to use for enrolling new recruits or just to withdraw for high level promoters.
I have read in several places on this blog speculation about these types of fraudulent credit transactions taking place and, judging from the questionable characters of the people at the top, I’m sure these murky deals were taking place between TF and high level promoters.
I haven’t seen any real proof of this, but perhaps it will come out in the future as the case against TF and it’s leader/top promoters progresses and goes to trial.
Why not ask to she directly? Yes, try it, I would love to know how she make all this money!
There’s a lot more about little miss Costa in another document signed by Federal Judge Aylton Bonomo last July 29th:
Long story short: they’ve found a lot of records about those two companies, being one (Brasil Factoring Fomento) owned by Leticia Costa and the other (Agrofruta do Brasil, with a paid-up capital of 10 million reais) onwed by Leticia Costa and Jozelia Sangali (Carlos Costa’s wife) AND some top TF promoters (names not disclosed).
Judge Bonomo has then allowed the lifting of bank secrecy so all accounts belonging to those companies can be fully investigated.
Oh… and there’s this too:
Don’t worry, The Costas… I’m pretty sure daddy Costa’s Youtube video with some sweating and paper waving will solve it all.
Source (PT-BR): http://goo.gl/Dnfk65
For the first time, the Carlos Costa family have a REAL orange company!!!!
If you know portuguese, will understand that “orange company” or “empresa laranja” is something to wash money! Did they choice a fruit company because they have a good sense of humor?
Men… Why in hell they use a fruit company? Did they want to “literary” give bananas to people?
What good fruit joke can I use in this case?
I am glad they’re exposing Costa’s BS in Brazil. TelexFree is just as rotten there as it was in the US.
And it’s high-time someone put a stop to the nonsense Costa was getting away with publish on YT.
Going after his little crony band of followers for perpetuating the lies wouldn’t go astray either (in the same manner top investors in the US are being sued).
The only thing I’ll give Costa credit for is not leaving the country before making a mockery of its legal system and thinking it wouldn’t ever catch up with him (pulling a Manoj Kumar).
Costa’s definitely thought he was the smartest person of all. He thought that by involving several companies and people in those schemes authorities would never get to him.
I guess by the time he saw things comming his way the only exite strategy was trying to run for congressman (for parliamentary immunity). He may have thought it was too late and he was too well known for just running away.
And, let’s not forget, he still thinks justice is made by a bunch of fools.
That’s why I have tried to describe some of the uses. You added some details to it from a first hand viewpoint.
My description was related to Mikaella Campos’ story about the promoter / tax payer Elpidio, plus other unnamed tax payers from her research. They all reported similar problems about delayed tax reports / misrepresentation of taxable income.
I haven’t identified Elpidio’s tax problem in detail, e.g. I don’t know anything about what he reported himself as taxable income from Ympactus. I don’t have any detailed knowledge about the other tax payers either.
I mostly have information about the system itself, i.e. the separation between internal transactions of “internal funds” versus real monetary transactions to and from external accounts.
I tried to offer the information I have as background information for a potential story for a “financial reporter / investigative reporter”. She must find the story herself, i.e. I can only offer background information and different sources (your information is one of the sources, it will fill in some details about how people used the internal transactions in reality).
Post #77 pointed out that she MIGHT be interested in some additional information. Then I had a few posts analysing some of the points in the information I have, a type of “internal thinking” (I was simply preparing for how to present it). It’s a type of “organizing and refreshing memory”.
Post #90 jumped directly to a main conclusion, i.e. I started from the viewpoint of her OWN story in that post. That’s a communication method, a method to make it easier for the other person to recognize information. Then I added something about the external / internal payment system. That’s the CORE of some potential tax problems / some potential tax frauds.
Then I offered some “reliable sources”. My intention was to show that I can back up some of my own information indirectly with “official types of sources”. I simply used the first source I remembered where to find.
The priority there was about the TYPE of source (official versus unofficial). It’s one of the “tools” she will need as a reporter, she will get better answers from agencies / tax authorities if she can mix in some reliable sources in her background research.
Your information may add some details to it, i.e. you have first hand experience from use of the system where I only have received information indirectly from many different sources.
CURRENT STATUS / BACKGROUND STORY
The current status is that she wrote a story about some tax problems related to TelexFree, and I offered to add some “background information” (about the system itself rather than about the tax payer’s problem).
Any “next step” will normally require a decision from her, e.g. about whether or not that type of information can be relevant and can be used. She must identify SOME potential uses (for herself) before it can be of any interest to her.
My post #90 was a type of “fishing expedition”, i.e. I don’t know exactly which information people can be interested in so I simply tried to offer some of the information I have (as a “sample”).
Post #90 identified the TYPE of information I have = it’s about the system itself, about how people used the internal payment system. It’s also about some logical explanations, and about some sources to back up the information.
My “fishing expedition” analogy will allow me to add more information, but I can also try different types of “bait”. I will most likely prefer to switch bait.
“Extended background story”
There’s an extended background story here too. Mikaella asked about using this website as a source one year ago. At that point in time, we mostly reported about the situation in Brazil.
We didn’t have any official sources in the USA (of the type reporters normally will ask for). I offered ponzitracker / Jordan Maglich as a potential future source (“He’s writing for Forbes Magazine, and if he’s good enough for Forbes then he’s probably good enough for you as a source”).
The information I had back then was rather vague. I had just started to look into the internal workings of the program, and I didn’t have the correct types of sources to offer. That has changed now, there’s a lot of different sources available.
Patrick Pretty with some Faith Sloan research:
Why did Illinois jump in here? Is she a resident of the State?
Don’t believe it matters. States often jump in by themselves if they think the Feds aren’t acting fast enough.
Jerry Brown was famous for slapping down YTBI/ Zamzuu during his stint as Attorney General California. Illinois also followed up with a secondary lawsuit and squeezed more money out of them.
So the states going hard after fraud was Montana, Illinois, California, and more recently, Massachusetts. (Though technically, Mass is a commonwealth)
All true, but why only Sloan and not the rest of the gaggle as well?
Yes, according to the quote in Oz’ post.
The standard defense argument should normally be “It wasn’t about promoting! I was directly ordered by a court to preserve evidence / documentation, and that website contained some of it”.
Where did you learn that the Illinois ban was based on POST- Consent Order web postings?
I don’t believe the 3 other promoters (Rodrigues, De la Rosa, Crosby) have been very active lately. TelexFree’s bankruptcy filing in April more or less ruined the market for them.
Then why didn’t it do the same for Sloan?
That’s not entirely true, at least not for Sann Rodrigues. From his FB wall, about 2 hours ago:
Accourding to Patrick’s article the state of Ill. also banned Wanzeler, Merrill and Labriola as well.
They arent residents of that state either.
She first got information on May 27 (according to Doc-130, “Verified Motion for Leave to file a Response …). 🙂
I read Patrick’s article too. The “executives” of Telexfree were similarly “banned” in Illinois (including Labriola and Craft) but no other “promoters” besides Sloan.
So what? So did the others.
Looks like Sloan is playing ball with the SEC.
A mutually agreed motion has been filed requesting permission for her to set up a Wells Fargo bank account for non-TelexFree funds.
Crosby and De La Rosa were granted similar concessions once they began to hand assets over.
Somebody in Brazil/Portugal want to send Sann Rodrigues an email in Portuguese and find out what he’s pushing now?
VICSS, or “VIC Social System”, is supposedly some sort of social dating network, and it ALREADY got red flagged by WOT. 🙂
Website itself is dead, but here’s the translated description via WOT
I spotted that too. Was active around 2010 or so and has obviously collapsed.
Ah Sann, how many scams notches do you have on that belt of yours.
it’s his own website.
You mean a bank account where she can deposit the proceeds of a honest days hard work.
I’m afraid that Ms. Sloan will be dissapointed at the dollar amount this account will receive compared to the bank accounts tied to her MLM ventures.
I read somewhere on this blog that she was driving a bus now for a living?
At this point, anything that Sann Rodriguez is involved in can automaticaly get red flagged. He has no reputation whatsoever except for in his own mind (judging from the fake awards he gives himself)
Isn’t he prohibited from promoting fraudulent business opportunites or is that just unregistered securities? Is he still in Brazil or here in the US with his luxury cars?
I forget if he ever turned in a list of his assets to the authorities like to was supposed to. Where does the civil case against him stand?
In a wierd way, I can understand his position. I don’t know what I would do with my life either if all I new was promoting scams.
I believe that was a rumour. I have read it to, and I also made some comments about it. But I haven’t seen anything about it in the court documents.
The idea itself isn’t bad, i.e. the idea of legitimate income from normal work. A court will actively try to protect legitimate income sources, e.g. it may unfreeze a bank account if it’s needed for that type of legitimate purposes.
Brazilian famous annonymous Blogger, and fraud repporter, “Canal do Otário” released a post on the major Ponzi pimps from Brazil:
The post appears to have been based on an earlier story published by “A Gazeta”.
It’s likely some sort of offhand self-disparaging remark she made herself . She may have driven a school bus at some time, but I seriously doubt she had time to drive such and she’s a bit too old to be a new hire, IMHO of course.
Sann Rodrigues, in his latest video, is promoting GetEasy and some other Brazilian company, Domo Premium. How can this guy get away with this?
He is telling people not to build these “companies” in the US because of all the legal issues. Good-grief! Can’t this guy be stopped?
If Rodrigues is indeed pushing Get Easy then he’s in violation of the preliminary injunction against him. He’s not allowed to be involved in unregistered securities.
AFAIK none of the other injunctionees are pushing opportunities. So Rodrigues is either desperate (likely seeing as all his toys were seized and his money frozen), or incredibly stupid.
When these TF reload schemes flop he’s going to be in pretty deep shit.
My hypothesis is that since Sann Rodrigues is the only Brazilian of the injunctionees, he foresees that he can always flee to Brazil if things get messy.
The others are more “stuck” in US…
Well Wanzeler has already fled (has dual-passport).
I did read that Rodrigues is claiming to be back in the US. If that’s the case and the SEC are monitoring him, I wouldn’t be surprised if this all comes out in the wash at a later date (to his detriment).
Sloan tried the whole “not gunna keep me down!” bravado thing and they shut her down pretty quick. Rodrigues might be flying under the radar now but it will catch up with him as the case against him progresses.
If he’s still hiding out in Brazil though well then I guess he’s free to scam away (assuming he never wishes to return to the US or do business there). AFAIK he’s not part of the Brazilian criminal investigation, at least not publicly.
Joeseph Craft has filed a “I knew nothing but TelexFree was probably a Ponzi scheme” answer to the SEC’s amended complaint.
How does a dude so close to the money think he’s going to get away with feigning ignorance? I mean cmon, he was the company’s accountant since 2012.
How do you provide “honest and legitimate accounting services” to a Ponzi scheme?
One positive development from this most recent court filing is that now you have an insider who is admitting that TF was a Ponzi scheme.
That should make all the other people at the top such as Carlos Costa look like a doofus claiming that TF in not a Ponzi in his videos when the CFO of TF is saying that it was a Ponzi scheme.
I can’t wait for all the dirt to finally come out and we can say who, if anybody, cooperated with authorities.
Two things that stick out for me in this article are:
1. How people can rationalize doing anything really in the name of making money. Especially in Brazil, I think, that people have desensitized themselves from the wrongfulness of what they are doing and these schemes have just become commonplace to the point that there are a large number of people who truly consider joining these schemes repeatedly (and early) as a legitimate way of making money.
2. With such high profile repeat offenders it shows how the authorities are so far behind in prosecuting these types of financial crimes, especially in Brazil, the land of the pyramids and Ponzis.
No wonder these people can openly go from one scheme to another freely deceiving others. If you put up an argument against them they make you feel like you don’t know what you are talking about and are against making money.
And if you tell them about their past failed MLM ventures, I’m sure they will blame it on the authorities for being corrupt and inept.
And they would be technically correct because here they are freely promoting another “opportunity” when the prior opportunity they promoted has clearly failed, or even worse was proven to be fraudulent.
I finally had a chance to go over Sann Rodrigues’ entire video posted on his Facebook page.
He created this Association called AME (amemlm.com). The purpose of the association, he says, is to help MLM distributors to defend their rights.
He emphasizes that the association will not be participating in any MLM company but it will do consulting jobs for them.
He continues on saying that his “expert advice” has already been requested by several companies, but right now he chose to provide consulting expertise only to Domo Premio and GetEasy.
These are also the two companies he is “recommending” to people.
He also says that he will be involved with GetEasy’s leadership in Brazil for their tour that will be taking place in September.
Here’s my question, what kind of strategy is this? Can he claim that he is not recruiting, only giving advice, therefore not violating the preliminary injunction?
We can only hope there will be an undercover agent answering this polite request on his Facebook post: “Please inbox for links if you are interested in working with me.”
Rodriguez only has interest in these companies for $$$.
However he’s getting paid, given the nature of GetEasy he’s likely to be in breach of the injunction. And the fact that he hasn’t applied for a bank account like his other co-accused to deposit non-scam funds into speaks volumes.
Having already demonstrated they were all over Faith Sloan’s post-TelexFree nonsense, I’m sure they’ve got Rodrigues under close surveillance.
If he keeps it up and given his regulatory history, I wouldn’t be surprised if Rodrigues ultimately faces jail time. He’s clearly demonstrated he doesn’t give a shit.
I think we can all agree he’s lost his mind ….along with his cars, homes and soon will lose his wife to the pool boy since at least he has a job and lives in one of his owner’s cabana’s. : )
And I don’t know what to think about any business willing to attach his name to their wagon. (old american saying/reference) : )
So he wants to be Brazil’s Troy Dooly?
Bravo K.Chang…: ) Dooly is going to be doing less hanging out being the “beach side CEO”. I see at the least an inland trailor park in his future.
These are also the two companies he is “recommending” to people.
Sounds like promoting to me.
Brazil’s “Canal do Otario” also published about Craft’s “confession”. Unfortunately, I think he was the only Brazilian website to publish this.
He focused his article on how stupid Craft’s claim of “not concluding before March/2014” that it was a Ponzi, and the obvious: that he’s just trying to diminish jail time.
It was funny how he started the article: “Bomb, Bomb, Bomb”, as a reference as how Telexfree affiliates always started their promoting videos.
Businessman working with MLM runs on Redinha
Was he a TelexFree affiliate?
Yes, He was a Telexfree affiliate and an affiliate of MANY other Pyramid Schemes, such as Bbom, Unetenet, Mister Colibri, Publika, among others.
He left a wife and an 8 year old daughter.
I wonder what Costa thinks about going out a political martyr?
Wanzeler’s paranoia must be slowly eating his mind away too.
I wouldn’t be surprised if he came running back to the US pretending he’s here to comply with the law when, in fact, he is scared to death thinking to himself: Brazilian law and justice may be slower and more corrupt than the US, but its vigilante justice seems to be more efficient than the US.
A 32 years old man was recently shot too, although he didn’t die. He was shot by a co-worker he had convinced to join Telexfree.
There were over a million people involved with Telexfree, I guess we can’t expect all the conflicts that arrised from the situation to be solved peacefully. People shooting each other because of Telexfree might become a common theme in local news for the next months.
By the way, the link gave us the value of the debt that resulted in the shooting. It was R$ 3.270 (USD 1,440). I believe it is certainly not the amount of money that justifies risking going to jail as a murderer for, but the current minimal wage is just R$ 724 a month, so if the man was poor I understand why he was so desperate to get the money back. Desperate enough to try to kill a person and now hide from the police.
A lot of this I believe has to do with the attitude of the promoter. If he has a f you type of approach toward the people he recruited, then this can definately make things worse.
Many promoters are like your best friend when they are recruiting you. They would say “call me anytime”, “we are a team”, “you’re guaranteed to make money”, etc
But when the scheme collapses they can be some of the meanest, defensive, lying, heartless people not responding to their phones and telling people to get lost and that you took the risk so it’s your fault.
In other words, it is often less about the dollar amount lost that leads someone to physically hurt or kill someone and more about the feeling of being deceived and being disrespected.
This may be compounded by a pre-existing anti-social personality or an anger issue in the person doing the hurting or killing. You can imagine anger building up in this this type of person after repeatedly being stiff armed and disrespected by the person who, just a few months ago, was your “best friend” when trying to recruit you.
Would not be too surprised to see “bodyguards” near Wanzeler’s place… and maybe the bodyguards may rob them or demand more money one day or they’ll walk off into the sunset. Paranoia… paranoia…
Hah, most scammers do that. Paul Burks, the “kindest grandpa”, the “singing magician” who entertain seniors in retirement homes, also the head of RVG, which owns Zeek Rewards ponzi, said exactly that, “I never told people to put in more than they can afford to lose. Don’t blame me.”
I believe you have described the problem quite correctly. I haven’t looked at that particular story, but your description can be applied to many other types of problems too.
It’s partly about “professionalism”, e.g. most people will try to solve the problem as they see it themselves. Blaming the other party (e.g. “I didn’t tell you to invest”) may look completely rational from one perspective.
Nothing new, but US Authorities finally reported about the “Fake” rented Telexfree Office in MA:
How many people does one have to recruit to get shot? A hundred, ten, one? What if you happen to recruit the wrong “one”?
If you have a downline, you are that downline’s promoter whether you had mal intent or not. This is a point often overlooked in these recruitment based “business opportunities” and why I’m reluctant to call recruiting participants “victims”. People don’t do their due diligence, they listen to big promoters, see dollar signs, and willy nilly expose others. People are taking on a HUGE RESPONSIBILITY when recruiting/profiting off others.
More news on Telexfree disseminators
You will probably need a few to be sure to find the wrong one, but it’s also about some “personal skills” (some people are much more clever than others when it comes to attracting trouble).
Many recruiters are friends, family members, neighbors etc., e.g. I gave an answer 2 days ago to a “My mother in law is trying to recruit me into a Ponzi scheme”. Fixed pre-defined rules will not cover situations like that.
Ponzi schemes like Zeek Rewards and TelexFree will grow because ordinary people are the main recruiters. That’s why most reload schemes will fail. They will try to attract experienced recruiters with downlines = the wrong type of people for long term growth.
How many people does one have to recruit to get shot? A hundred, ten, one?
It takes only one, who’s really pissed you stole his money.
So, blood runs in the street because of Telexfree. It’s unbeleivable.
I’m wondering how pissed off the people are who where taken by the so called “movie stars” of the upper echelon of Telexfree.
Hopefully they’ll just play darts with the photo of them with Merrill, Carlos, or Labriola’s arm around them with a thumbs up and a cheery….I’m 100% Telexfree….
( oh brother )
Its much more probable that out of a few, all will be the wrong one.
I can imagine the shady characters that this drew in but what about those with certain political or social standing that wouldn’t want to be on the Telexfree “list”.
Wonder what the president of Haitti has to say for himself
Wow, the latest filing in the indictment cases is massive. Over 100 grand jury subpoenas issued and plans to fly over witnesses and law enforcement agents from Brazil and elsewhere to provide evidence.
They’ve requested an exemption from the Speedy Trial Act due to the massive scope of the case.
I think when the dust settles Wanzeler and Merrill can look forward to being locked away for a very long time.
(No time for a proper writeup unfortunately)
Quotes from Veja Magazine:
Typical Costas reality inversion, it seems.
I owe you money? No! You owe me money! I am a criminal? No! You’re a criminal and corrupt!
Carlos Costa, today 08.19-2014
Telexfree are questioning about the translation process of the American SEC that was incorporated into the process in Brazil.
What about the surprise we had this morning to learn that the United States summoned over 180 people to the process and still need witnesses to Brazil, why not have proof, can not prove that it is a pyramid.
He says that in Brazil can not try and incorporate the complaint by the SEC of the American process and also in the United States for failing to prove the witnesses are willing to Brazil and elsewhere in the world and will never achieve.
According to a survey done by the Brazilian Telexfree, the final value of the return is 110 million U.S. dollars to Brazilian investors. and they have more than 250 million U.S. dollars in Brazil blocked.
I think entertaining Costa’s legal opinions as anything more than the butt of an $1 billion Ponzi joke is rather fruitless. The guy has consistently demonstrated he has no idea what he’s talking about.
Just take the “why not have proof?” sentiment. That rhetoric might work convincing residents in the backwaters of Brazil, but you’d have to be an utter ignoramus to ignore the seizure of evidence and case US regulators are putting together against Merrill, Wanzeler and Costa.
Costa just sounds upset the US aren’t interested in his nonsense.
He’s basically telling telexzombies what they want to hear: there’s no proof, everybody is lying (includind US and Brazil’s justice) and whoever says anything “negative” should be completely ignored ’cause they’re just envious people.
In other words, he’s trying to portrait himself as a “martir”, who’s incessantly fighting for the poor, poor zombie
Notice Costa claims again that Telexfree has assests of over R$ 600 million.
They once offered R$ 660 million to unblock the operations in 2013, without mentioning that this value was actually their own estimation of the companies trademark. It was only explained days later.
Now Costa resume his “We have over R$ 660 million” claim, and again he doesn’t mention what exactly is it. Many people hear and believe they have this value in money.