New TelexFree criminal case filed over VOIP irregularities
Sure to add to the legal stress TelexFree owners are already currently under, news today that regulators in Brazil have filed another criminal case against the company.
The new case revolves around regulatory issues surrounding TelexFree’s VOIP offering in Brazil, and is the culmination of a criminal investigation that began back in 2013.
Named in the criminal proceedings are TelexFree owners Carlos Wanzeler and Carlos Costa. Wanzeler is currently hiding out in Brazil, after he was indicted in the US last year on charges of fraud and conspiracy.
At the core of the case is TelexFree’s offering of VOIP and failure to register with Brazil’s National Telecommunications Agency (Anatel).
As per the Federal Public Ministry, TelexFree’s business registration in Brazil stated the company was “working with VOIP” and “exploring multimedia and fixed telephone communication services”, but had no authorization to do so.
The investigation began after Anatel, in an inspection, found irregularities.
The prosecution for crimes against the system of Telecommunications was accepted on Monday, 26th (of January).
Anatel technicians and the police found that the VoIP Telexfree operated in two modes: the first was through a software installed on computers.
You could communicate with others who also have the program installed on their machines. For this type of service there is no requirement for Anatel authorization.
However, the application – called 99Telexfree – also made calls to landlines and cellular service (which) would force Ympactus to obtain a grant from Anatel and contracts with telecom operators because of the need for interconnection.
The other crime, according to the complaint, was using the Call Back system in which the subscriber connected to the provider number, inserted the password and the phone number at which you would like to speak, hung in and then waiting for that posteriomente, the system do the recall.
For this type of service, (the company) also needed Anatel’s authorization.
TelexFree’s initial response to the case was to place the blame on the company’s US operations.
The owners of Ympactus asserted they were not responsible for the VoIP and the operation of the system was conducted by Telexfree in the United States.
Set up to launder funds between Brazil and the US, Ympactus is the name TelexFree operates under in Brazil.
Up until 2013’ish, Carlos Costa, James Merrill and Carlos Wanzeler were the owners of the company. Court documents in the US revealed Costa would eventually “sell” his share in TelexFree to Merrill, still retain his stake in Brazilian operations.
Meanwhile how blaming TelexFree for Ympactus’ regulatory woes makes any sense escapes me.
When the same people own both companies (which are in reality just one company), all you’re doing is shifting blame from yourself… to yourself.
TelexFree’s defense gets even more ridiculous when you consider, as per the MPF’s complaint,
to operate its business model, Telexfree used the company’s infrastructure Disk a Vontade, which belongs to the family of Carlos Wanzeler, and also had no license to operate.
TelexFree did go on to buy Voxbras, a company actually registered and licensed to offer VOIP services – but this was only after Anatel began investigating. By then the offenses had already been committed.
In the grand scheme of things not having a VOIP license might seem trivial in contrast to what TelexFree and its owners are facing in the US, but bear in mind
if convicted, the Telexfree owners can be fined up to R$10,000 BRL ($3886 USD) and sentenced to two to four years in prison.
The fine is of course laughable but not the attached jail time. Add that to what Wanzeler is facing in the US and, extradition issues aside, he could be spending a considerable amount of time behind bars.
Carlos Costa meanwhile is yet to face legal action in the US. At some point one would imagine legal proceedings to be filed against him for his part as an insider of TelexFree.
A criminal investigation into TelexFree, code-named “Operation Orion” was launched by Brazilian feds back in July of 2014. As of yet however, no arrests have been made.