telexfree-logoNews broke a few weeks ago that the firm charged with conducting an audit of TelexFree’s Brazilian operations had requested an additional 120 day extension.

By my records this is the second extension Ernst & Young have sought, with the first requested and granted back in July.

Ernst & Young trotted out the same reason they used in July for the recent request, citing issued of complexity in auditing TelexFree’s Brazilian operations.

So far, thousands of checking accounts with ties to Telexfree were found. Also identified was a large volume of resources handled by business in Brazil.

TelexFree supporters in Brazil still hold out that the final audit report, now due in early 2015 will absolve TelexFree.

Personally I think “complexity” is just code for “the level of fraud we have uncovered is unprecedented”. Regulators in the US meanwhile are currently going over 400 terabytes of data seized when TelexFree’s US offices were raided earlier this year.

Realistically, if everything was above-board there’d be no need for what now cumulatively constitutes an 8 month delay in Ernst & Young’s audit. What perfectly explains the delay though is the strenuous piecing together of forensic accounting information.

The task of accurately tracking the flow of money from new TelexFree investors to those who had invested previously is no small task. Let alone drawing conclusions from the reports and presenting it to the court.

Working out where and how TelexFree’s owners hid the money they skimmed off the top is also likely to pose a challenge for the firm.

Meanwhile word on the grapevine is that Carlos Costa is currently under medical observation. Apparently things have taken a turn for the worse after his crushing defeat in recent Brazilian elections.

Costa hasn’t been seen or heard from publicly since the election earlier this month. His campaign Facebook page and website were deleted just days after the elections were held.