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.
Shoutout to the readers who sent in a heads up on this story!
aside from blaming themselves, didn’t they come into the US touting already selling VoIP as their ‘product’?
posteriomente: a short while later / afterwards
To do proper international VOIP calls, that allows a computer or cell phone to call regular phone numbers, the VOIP company has to buy SIP “terminations”, which are usually sold in batches of 100,000 terminations.
Cell phone service operators charge significantly more for cell phone terminations than for landline terminations.
As the article mentions computer-to-computer calls, and some kinds of calls between cell phone apps, cost nothing. Nothing but the Internet costs, that are already borne by the caller and the recipient.
Hi has SEC and Fbi SUBMITTED the last criminal evidence against telexfree as suggested by the court?
@wasike
Dunno what you’ve been reading but they’re still in the production of discovery stage. Trial comes after that.
It’s the first Preliminary Report, with an overview of the case (“as it was” to “as it currently is”).
Problems analysing the data:
Page 10 “B. Analysis of Debtors’ Books and Records”.
The Trustee first had problems getting access to the data, because the servers had been seized by HSI. Then they had problems identifying the correct configuration of servers.
Then they had problems understanding the database (because of lack of manuals / Brazilian source code / many problem fixes using random methods).
They have solved most of those problems.
Then we have a “dirty data” problem.
ONE SERIOUS PROBLEM?
Then there is a “connection between accounts and sub-accounts” problem, described as “no field in the database to link all accounts for a particular participant”.
It looks like they expected the database to be similar to other databases, e.g. that it would track individual users? 🙂
ONE SOLUTION MAY BE “THINK DIFFERENTLY”
The software is MLM software / pyramid scheme software, not an ordinary database. It’s also designed to work as Ponzi scheme software.
It’s designed to track each account and sub-account as “members in a downline”, starting from the top of the system with the company itself as the main member, followed by one or more Master Distributors (e.g. one for Brazil, one for United States, one for Global), followed by some key distributors, followed by the ordinary members or accounts.
It isn’t designed like they THINK, e.g. if they compare it to bank software, membership databases or databases in general.
It’s organized like this:
Master Distributors (one or more)
* 1st level of downline
** 2nd level of downline
*** 3rd level of downline
**** 4th level of downline, etc.
The unique field used to track the individual accounts (where they belong in the system) will be the membership number assigned by the system itself.
It will not use the same method used by other databases, where some user specific field can be used to track each individual user (even if they have multiple accounts).
A bank software can e.g. use the SSN as a key identifier and assign that unique number to multiple bank accounts belonging to the same user.
will be good reopen back office for who closed almost for a week in that way every body can submit all information for the claim.