E&Y Report “conclusive”, TelexFree lawyers wrong again…
There is evidence that the activities of Telexfree have characteristics of a financial pyramid.
-Ernst & Young report on TelexFree, February 2015
That an average person would agree that the above statement is conclusive is a given, but not TelexFree’s lawyers.
Despite the detailed reasoning behind E&Y’s conclusion (based on information TelexFree had provided the firm), TelexFree’s lawyers were quick to denounce the report as inconclusive.
The company even went so far as to attempt to deny public access to the report, arguing that the contents of it were protected by tax-secrecy laws.
Thankfully that argument was rejected.
But while the public still don’t have access to the entire E&Y audit report, today saw that process edge one step closer.
Concluding the obvious after going over Ernst & Young’s report herself, Judge Thais Borges ruled that the report is indeed conclusive.
This means that both TelexFree and the Acre Public Prosecutors Office now have 15 days to file any further correspondence on the case.
I believe this can include an appeal from TelexFree, although I’d be hard-pressed to see the point.
Between Carlos Costa’s recent sweaty videos and TelexFree’s lawyers insisting the report is inconclusive, it would seem the company now doesn’t have a leg to stand on.
With Borges ruling the report is conclusive, all that’s left to do is to challenge the data in the report itself.
Seeing as the report concludes TelexFree is a Ponzi scheme based on inhouse information provided to E&Y by TelexFree, this would appear to be a pointless exercise.
Especially when you consider TelexFree and Costa put so much emphasis on the belief that a third-party audit would remove any doubt that the company wasn’t a Ponzi scheme.
Costa had been proclaiming as much for months in the followup to E&Y being appointed to conduct an audit.
Looking forward, the 15 day response deadline puts us at Monday the 20th. Whether or not TelexFree file anything further remains to be seen. Ditto the Acre Public Prosecutors.
If neither party files any further correspondence, Judge Borges will make a final decision on the case.
What with her ruling that the E&Y report that concludes TelexFree is a Ponzi scheme is conclusive, you can probably figure out where this is going…
Actually, according to what’s been published by Acre’s DOJ, starting on April 7th both Telexfree and Acre’s PP have 30 days to elaborate questions about the audit.
Judge Borges recommended that it should be done via written documents due to the complexity of the information and that an in-person meeting should be scheduled just in case it is really necessary.
She also stated both parts requested the right to use the 30 days time.
After those 30 days, the parts would have another 15 days to claim whatever they might have to claim.
In case one of the parts do not agree with the proofs, they should provide their own and a new discussion begins…
In a nutshell: this is likely to drag on for a long, long time
Oh, and by the way, Carlos Costa has released just yesterday another sweaty video of him “proving” the report is inconclusive.
His strategy was the same he used with another report made by Brazilian IRS: cut parts of the document, paste it out of context and claims that is proof enough EY knows nothing of math.
And he usually uses the parts provided by Telexfree and not the auditors.
The problem with that? Once the IRS report came to light, Carlos Costa was exposed as, suprise suprise, a big fat liar. That will probably happen again soon.
Well that’s markedly different from what Globo reported!
Obviously TF are going to file an objection then, and then what? E&Y’s audit is discarded and a new discussion begins with TelexFree’s proof?
These are $1.8 billion Ponzi scammers… they cannot be trusted.
I thought the whole point of the E&Y audit was for a neutral third-party to go over the information. Obviously anything TF provides based on the data is going to be flawed. Costa’s rants and lies have already demonstrated that.
well oz, if the court asks for a third party expert opinion, then it obviously has to give the defendants, leave to poke holes in it. that’s just due process of law.
if costa is only basing his ‘protests’ on half baked truths, the court will reject TF’s ‘explanations’, and make a decision on the basis of the E&Y report.
i’m going with – the court will accept E&Y’s audit report, because there’s just no explaining around telexfree’s business model, no matter how hard costa sweats.
For the record, TelexFree have had some twenty something appeals denied in this case.
Every argument that could possibly be raised has been raised and rejected.
Time for sentencing already…
carlos costa has publicad YET ANOTHER video:
in this one he is appealing the E&Y and accordingly have given E&Y 30 days to answer 3 critical questions that supposedly clear telexfree of any ponzi wrongdoing….
you can read all about it here:
(note to Oz: this website below is NOTORIOUS for spreading misinformation, promoting scams, and endorsing carlos costas lies)
wow.. i mean, the audacity… these guys are off the chain….
Yeah, I know… But unfortunately it is what it is. That’s in Judge Borges’ decision published in Acre’s DOJ website.
Judge Borges is not, and will not discard EY’s report.
She was very clear in her last decision: she said if no one had nothing else to say, she would be moving the case to closing procedures. But if anyone wants any other sort of proof, the part complaining will be responsible to provide that.
And (I imagine) she will not give Telexfree another year to come up with some new audit.
It’s clear, according to Judge Borges’ last statement, that EY’s audit report has provided enough information to back her decision up, whatever that is, or else she would have requested herself new details or a new report.
The rest is all just “legal procedures” which unfortunately are used by criminals to avoid the inevitable. And believe me: Costa will milk every last drop of that.
Can somebody just ask Costa already how much retail activity Ympactus had?
Dude’s been trying to derail the legal process for two years now. It’s not working.
costa and his lawyers say, telexfree was selling ‘products’ via MLM.
but the voip packages were barely used by telexfree members.i cant locate the percentage right now, but according to the SEC, USA, voip packages were barely consumed. i expect the same very poor usage of voip, in brazil too.
why would telexfree members pay month after month, for a service they did not use?
so, even if costa says telexfree was not paying commissions on recruitment, his product had very little real value, and did not explain why people were buying it.
I’m reading all this but just to clarify, as anjali said above they are being prosecuted mainly because they don’t have a real product to sell.
So what if they had? I mean, there is lots of new schemes showing on the internet recently all of them with real products but with this same Telexfree formula.
In my opinion a Ponzi scheme happens when you earn money from the people who are after you in the pyramid that you did not referred.
A normal sell would be: refer someone and earn a commission. Fill 2 legs after you and is a pyramid.
Am I wrong?
That is one of the factors contributing to a Ponzi scheme.
It is not definitive because plenty of Ponzi schemes have products these days.
Your opinions are irrelevant, moreso when they are wrong.
Paying off existing investors with newly invested funds = Ponzi scheme.
i said that in the specific context of costa and his lawyers claiming, that they were selling ‘products’ via MLM.
the ‘value of the product’ is One of the Factors considered in deciding the legitimacy of an MLM scheme.
there are several other factors, which we can discuss another day, once you understand what a ponzi/pyramid is, for starters. whether a scheme is a ponzi/pyramid, is decided on the basis of how the scheme generates and pays money.
Sorry, no mean to offend.
But that’s why these people are still not being arrested. People like Costa always claim their schemes are legitimate.
Until justice proves it’s a fraud, schemers keep starting a new company almost everyday.
And I know my opinion is irrelevant as we all are. It seems to don’t matter at all.
I remember like 2 years ago some discussions over the internet talking only about Telexfree and a few others. Today we have countless..
I’m thinking about starting one. We can sell custom garlic breads and charge $ 50 each, but we have to sell those in pyramid to sustain the scheme, and everyone who brings at least another 2 gonna earn comissions of their comissions.
Let’s use the same formula.
Reload schemes don’t last as long as their predecessors.
Right here, right now – with the shutdown of uFun Club, there isn’t a single MLM Ponzi scheme out there that’s in the millions.
You’ve got all these small potatoes vying for a small pool of funds.
Having a product makes it “less likely” to be a scheme, but not impossible. With a product, what you get then is “product-based pyramid scheme”.
Basically, a business’s lifeblood is SALES (of product or service) to actual users of the products (and not those who expect to PROFIT from the sales). Business that doesn’t sell most of their products to non-affiliates are schemes, not businesses.
Or as someone else that said on this forum (sorry I forgot the attribution)… Is the business making the money ALONGSIDE you… or FROM you? i.e. WHO is buying the products?
What I tried to meant is that they are keep running business and none get jailed. Of course this is all wrong. The garlic bread was a joke to show how schemers are selling products.
If the justice can’t stop them what can we do about it?
Ponzi schemers will always say they are legitimate while people keep thinking if there is a product it’s all ok.
If there is a binary below you in the scheme, it’s Ponzi.