Police investigate TelexFree for money laundering
With TelexFree expected to file a formal appeal against the injunction that has effectively shut down the business in Brazil, news broke today that police in Acre are now investigating the company for possible money laundering activity.
The Acre division of the Specialized Police in Combating Organized Crime Taskforce (known as DECCO), announced yesterday that they had
opened an inquiry into whether the management of Telexfree committed crimes against the economy and money laundering, among other crimes.
The inquiry investigation marks the second criminal investigation into TelexFree that is publicly known. The first being initiated by the Brazilian Bureau of Consumer Protection, which resulted in the detection of ‘evidence of crimes‘.
The opening of the police investigation, made at the request of the Special Action Group for Combating Organized Crime (GAECO) of MP-AC means the entry of the criminal sphere organ in these investigations.
Also revealed in the iG news report was the conclusion of the previous criminal investigation into the company. After the Bureau of Consumer Protection forwarded their findings to the Ministry of Justice and Finance, the Bureau of Defrauding opened up a case which resulted in the request of arrest warrants for certain “members” of TelexFree.
For reasons not clarified in the iG report, these arrest warrants were denied by a judge.
Meanwhile, rather than defend the business model (which has failed twice now in Acre’s courts), TelexFree appear to be getting a bit more creative with their defense.
Quoted in the iG article, TelexFree’s lawyer Horst Fuchs attempts to confuse MLM with Ponzi schemes, declaring that ‘if the state wants condemn [ multilevel marketing activity ], they need to establish in law what can and what can not be done‘.
What can and can’t be done? Oh I dunno Fuchs… how about be we start with the obvious – thou shalt not run Ponzi schemes?
Affiliates of TelexFree in Brazil also appear to be at a loss to defend the Ponzi scheme business model, calling on their fellow affiliates to instead write letters to the Acre civil court, declaring their “satisfaction with the company” as a reason to reverse the injunction.
Underscoring all of this however is the core principle that a Ponzi scheme cannot pay out more than it brings in. With recruitment of new investors still occurring, affiliates in Brazil appear to be of the belief that the company was not in financial trouble.
Buried deep within the financial paperwork belonging to the company however would be a balance sheet revealing how much money was put in and, more importantly how much is owed to every TelexFree affiliate.
TelexFree take in $299 from affiliates and promise a weekly “guaranteed” $20 ROI. Simple math dictates a flawed Ponzi business model.
Meanwhile TelexFree’s affiliates in the US seem content to ignore what is going on in Brazil. It was recently announced that the company would be holding a “TelexFree Super Weekend” over at NewPort Beach in Southern California on July 26th and 27th.
Join “The Haves and The Have Yachts” with a 100 Percent TelexFREE Smile on Your Face and a Shine on Your Dancing Shoes.
Dinner, Dancing, DJ, Monopoly Money Casino Tables, Cash Cocktail Bars – This Is A Harbor Cruise That YOU Don’t Want To Miss!
Evidently the irony of having prospective and existing affiliate investors play on Monopoly money casino tables is lost on the event organisers.
Items on the Super Weekend agenda include an
investor recruitment drive business presentation, business training and leadership cruise.
Organisers are charging attendees $40 to attend and an additional $100 if attendees wish to participate in the “harbor cruise”.
With TelexFree’s business operations unlikely to continue in the face of multiple criminal investigations and a criminal case expected to be filed by the Acre Public Prosecutor’s Office by the end of next month, US-based affiliates are most likely all too painfully aware that relying on recruitment drives in Brazil (TelexFree’s largest affiliate investor pool), is no longer a valid TelexFree investment strategy.
So who do they now want to pay for their promised Monopoly money returns…?
Grab a mirror and open up your wallets folks.