Carlos Costa lied about Brazilian IRS TelexFree approval
One of the recurring themes in Carlos Costa’s sweaty TelexFree news updates, was the assertion that the Brazilian IRS had gone over TelexFree’s books and certified the company legitimate.
Costa asserted as much with the knowledge that the IRS would not comment publicly on their report, and that the only other party with a copy was TelexFree.
What he wasn’t planning on however was the report being leaked to media outlet Globo.
And surprise, surprise… turns out Costa has once again been caught out telling porky pies.
The IRS’s investigation into TelexFree began in late 2013 and finished in February of this year.
Shortly thereafter, Costa took to YouTube and proclaimed the agency concluded that ‘96% of (TelexFree’s) revenues came from the sale of VoIP‘ and found “no irregularities”.
This formed the backbone of many of Costa’s rants to come, even after TelexFree was shut down and exposed as a billion dollar fraud in the US.
The first glaring contradiction between Costa’s report and what was actually published, is that the IRS indeed found irregularities within TelexFree’s business operations.
Gazeta Online (Globo) report,
Among the (tax) cheating found, according to the IRS, was that Ympactus taxes collected between the months from January to August 2012, put them making millions above the revenue volume allowed for this tax bracket.
In at least three official videos the company posted on YouTube, Costa is shown with papers and says that the IRS issued a report endorsing the company’s activities.
“The IRS reached its verdict. And I’m happy with that? Because, as everyone knows, the IRS was the only agency to date that has examined our figures … IRS Personnel did not find any irregularities. ”
However, the report says otherwise.
“Such analysis is not aimed to determine whether there is any illegal activity taking place as this criteria does not influence tax … (furthermore we) can not confirm the existence of the provision of VoIP services on the scale that Ympactus operates on in Brazil.
The report also records TelexFree’s refusal to co-operate with IRS investigators.
During the period of investigation TelexFree presented at least ten excuses for not delivering requested data.
The agency was given answers without any reasoning or evidence, which explained nothing about the questions directed at the company. TelexFree demonstrated an absence of interest in actually providing objective and insightful information to the IRS.
Apologies made to the IRS for failing to submit requested information, especially information related to affiliates and their salaries were, in many cases, merely delaying tactics.
Do your best to hamper regulatory investigations and then turn around and proclaim legitimacy when they fail to put together a complete picture? More of the same from TelexFree…
And just how much spin did Costa apply to the report when talking about it on YouTube?
Contrast Costa’s ‘96% of (TelexFree’s) revenues came from the sale of VoIP‘ and no irregularities” with what the report actually concluded:
Ympactus never provided invoices for VoIP services
Economic activity in the country by Ympactus was derived via training of affiliates to fund the network and their subsequent returns, based on the continued expansion of the affiliate-base, who operated under a facade of alleged sale of VoIP packets. The sales of which remain unproven.
In response to the leaking of the IRS’ report, TelexFree lawyer Horst Fuchs told Gazeta Online that
the IRS report contains “inconsistencies (that are) being appealed, so they reflect only the view of the fiscal agent and not the crystalline truth.”
Unfortunately Carlos Costa himself was unavailable for comment. Since his crushing defeat in a bid to enter Brazilian politics, Costa has not publicly been seen or heard from.
In related news, money laundering is a recurring theme within TelexFree circles.
A recent court decision against TelexFree revealed that the company had
illegally sent $174 million USD (almost R$500 million) to the accounts of members abroad.
The information was revealed in a decision unfavorable to the owners of the company in federal court in the 2nd Region.
The data pertains to the open criminal case in the United States. Since Operation Orion began in July, the Federal Court in ES had allowed the exchange of evidence between Brazil and USA.
TelexFree attempted to refute the information, claiming ‘it was all a mistranslation of American documents‘.
Now one of their top promoters is under the spotlight, with companies registered in his and his family’s name likely to have been involved in laundering TelexFree funds.
Pelé Reis was one of TelexFree’s more prominent Brazilian-based investors. With humble origins as a food vendor to top investor in the Ponzi scheme, Reis managed to steal over a million dollars (USD) from investors who joined after him.
Investigations have recently revealed that Reis was more than just an early investor though.
Behind the display of Ferraris, other luxury cars and property attributed to “hard work”, there are indications that Reis was one of the organizers a pyramid scheme that spread worldwide.
A federal investigation calls into question the legality the fortune accumulated by Pele, which includes an aircraft valued at R$400,000.
Publicly, Reis represents himself as a mere affiliate, but the former street vendor, his wife and four daughters, including two teenagers, had broken tax and banking regulations.
Assets belonging to the family have been frozen by the federal courts in Espírito Santo, for alleged involvement in irregularities surrounding Telexfree in Brazil.
The case against Reis was filed in October, however due to the sealed nature of the case it has only now been revealed.
According to the Federal Court website, there is suspicion that companies in the name of Pele, dubbed “piramideiro internet”, were used to mask illegal financial transactions.
As a result, Reis’ assets have been frozen. This includes his R$400,000 plane and a Ferrari Spider 360 Reis frequently used in his TelexFree promotional efforts.
All in all, to date around $500,000 USD in assets belonging to Reis and his family have been seized.
Cooperation between US and Brazilian regulators with regard to their respective investigations continues…
Thanks to the readers who sent in a heads up about these stories. Much appreciated.
Clearly, that can’t be God that Costas claimed to have been talking to a year ago…
WAIT!!!! so you mean to tell me. that Carlos Costa LIED ?!?!?!?!?
**gasps in shock
“piramideiro internet” translates to: internet pyramid “chunk” or “cluster”
these guys are so slick…..
Oz, I believe you should take a look on the following video about this subject:
It was released today, and it exposes clearly Carlos Costa’s lies you wrote about here. It shows a zoom in on the sheets of paper Costa shows, proving almost didactically that nothing he says is actually written on sheets he shows.
It’s got well written English subtitles. Everyone will understand. I hope you and the readers of this article are insterested in it.
About the “dubbed piramideiro internet” thing… it’s actually a bad translation. The original text in Portuguese is “apelidado na internet de piramideiro”, which better translates to “nicknamed ‘piramideiro’ on the internet”.
‘Piramideiro’ is a mix of pejorative and fun word for someone who enters a pyramid scheme.
Mr. Costa will end up having a heart attack for telling so many lies.
BREAKING NEWS! Word is out that Carlos Costa is considering converting to atheism. Apparently, there has been a lack of clear communication between Carlos and god about his motives and the subsequent massive failure of his blatantly illegal schemes.
According to Costa…”Running and hiding from the authorities was not part of the grand plan of things. I expected god to be more understanding.”
And here was I thinking Costa’s next move was to declare he was god indeed and that’s why he’s always been telling people that scam, I mean, company was run by none other than god.
But, hey, if he can break a contract with himself, what else can’t he do? Stop sweating, maybe…? Yuck.
during the election campaign carlos coast was interviewed by a journalist without much moral , but a journalist.
Carlos Costa proved quite religious (words of journalist ) and one of the passages of the Bible they like best is that which says : ” the Bible is that God does not choose the qualified , He qualifies the chosen ” …..
anyone know where it is written in the bible ? IN NOWHERE .
Who said it was Einstein , and the phrase went beyond … said : “God does not choose the qualified, empowers chosen, Do or not do something just depends on our willingness and perseverance “.
so finally Telexfree 0% ?
Yeah, scam companies “Guided by the hand of god” don’t seem to last long. And apparently sweating is a sure sign hell isn’t too far in the distance.
There is a mistake is this part: “illegally sent R$174 million (nearly US $500 000)”
The USD is worth, buy now, R$ 2,5097. The convertion of R$ 174 million would be USD 69,31 million, much more than just USD 500k.
Thanks for catching that. I went back and looked at the original text, it quotes $174 million USD (almost R$500 million).
For some reason Google translate likes to switch $R for USD and vice-versa. It’s easy to miss unless you look out for it.
Just I would like to know WHEN WE GOING TO HAVE OUR MONEY BACK !!!!!!!!
Still be a while yet. The criminal stuff has to play out first before the civil case pushes forward.
That didn’t surprise me. 🙂
Last time I checked kccllc.net, a few days ago, Darr was still conducting Rule 2004 investigations against different banks. That’s one of the first things to do in a suspected fraudulent bankruptcy.
From the Boston Globe article:
“Don’t send any claims now. It will be too costly to process paper claims, and result in less money to the victims”.
That has been my conclusion, too.
He’s rather optimistic. I don’t think he has looked very deeply into the mess of internal transactions and frauds inside the fraud.
At this rate, at least 3 years (from today).
Investigation will likely take a year, and claim process will add another 12 months, then all the back and forth as claims are validated, and Darr goes after any and all assets involved, then Brazil gets involved… and that deal had to be made… THEN finally another year to pay out whatever money can be distributed.
IMHO, of course. But it sounds reasonable.
More from the Boston Globe:
1.3 billion customer transactions. That must include the internal transactions of Ponzi points.
200,000 documents from banks (and still growing, if I have interpreted it correctly).
Estimated 60,000 ex-promoters from Africa alone.
Something about undocumented immigrants …
Most of the information is “useful info, what people can be expected to ask about”.
I was among the people who was frauded of about 5200 dollars.
I joined as a promoter. How can i file my application?
You’ll have to wait for the criminal case to finish IIRC. Darr’s working on it.
You should WAIT (follow Darr’s indirect advice, post #19). He will eventually set up an online claims portal where people can file claims directly. That’s his “vision” for how to do it.
The claims agent, Kurtzman Carson Consultants (kccllc.net/telefree), have had the opposite information (that people CAN file claims). But you should listen to Darr rather than to the claims agent. Darr is the one running the show, the one who makes the decisions for how to do it.
You can check kccllc.net/telexfree from time to time, to look for important updates. KCC will most likely be the company running a claims portal, but Darr will be the one ordering it.
Darr will eventually put up his own information website. That will be the main website for information to creditors.