TelexFree denied Acre appeal, injunction remains
Despite the widespread belief held by TelexFree affiliates that the three judges hearing the company’s injunction appeal today would overturn the decision, this did not take place.
In what appears to have been a rather brief hearing in Acre’s 2nd Civil Chamber Court, a unanimous decision was handed down denying the company’s appeal.
For now, the injunction that has effectively put a stop to TelexFree’s Ponzi operations in Brazil remains in force.
Not to be deterred by having two appeals rejected thus far, TelexFree’s lawyer Djacir Hawk ‘confirmed that the company will make an appeal‘.
From one of the Judge’s comments today however, it is pretty much guaranteed that any such appeal will be a complete waste of time:
“The law is the rule of the game and we can not go against the law,” said federal judge Waldirene Lamb when giving his vote.
To date, TelexFree have repeatedly argued that having a product automatically disqualifies them as being a Ponzi scheme. The reality that having a product or not has nothing to do with being a Ponzi scheme appears to be totally lost on them.
Shortly after the injunction was handed down TelexFree attempted to transfer $88M USD out of Brazil. Luckily, due to the injunction being in place, the transaction was thwarted.
Despite the attempted transfer clearly looking like an attempt to shift TelexFree’s funds offshore in breach of the injunction, the company’ lawyers attempted to explain away the transfers saying the funds were to “pay suppliers”.
Why TelexFree allegedly owed suppliers $88M USD was not clarified.
Going by Globo’s translate Portuguese article however, it appears Public Prosecutors are still conducting an investigation, the conclusion of which will have some bearing on decision(s) yet to be made by the court:
The TJ-AC will still wait for the opinion of the State Prosecutor to prosecute the interlocutory appeal.
Despite evidently having clearly breached the conditions imposed against the company by the granting of the injunction, TelexFree’s lawyers remain optimistic. In the face of being charged with being one of the biggest, if not the biggest Ponzi scheme in Brazilian history,
Djacir Hawk said that Telexfree is going through a ‘difficult situation’ because the locks but not at risk of bankruptcy’.
Horst Fuchs, another of TelexFree’s lawyers went even further, declaring
the new defeat (does not) endanger the survival of the company. There’s no chance of that happening.
Given that the injunction temporarily absolves TelexFree of its weekly ROI liabilities owed to Brazilian affiliate investors, I thought Hawk was stating the rather obvious.
How long TelexFree can continue to pay ROIs international affiliates based elsewhere in the world is unclear. As of yet no US regulator has announced any action against the company.
With TelexFree affiliates in Brazil urging their downlines to create fake accounts based out of the US in order to continue to withdraw their weekly ROIs though, there’s an increasing probability that TelexFree is going to pop up on the regulatory radars there.
Going forward, as I understand it TelexFree owner Carlos Costas has been subpoenaed for questioning by Public Prosecutors in Acre. TelexFree’s other two owners, James Merril and Carlos Wanzeler, appear to have fled Brazil following the injunction being granted but Public Prosecutors are attempting to bring them in for questioning.
Pending the outcome of those subpoenas, ‘the Federal Prosecutor has followed the case and possibly will also file a lawsuit against the company’.
Stay tuned…
When you set out to create a cake using a cake recipe, if you follow the directions for making a cake then naturally you will get a cake!
If you then become defensive about the cake not being something else like cookies or a pie, The first question one would have to ask is this….”what did you think was going to happen?” This is not magic!
If the marketers would look at the facts, look at the games that Telexfree have played with their core product (voip), their follow along product marketing (supplements) and the blatant misstatements of facts about the Best Western Hotel chain deal, the fraudulent insurance coverage story, the marketing materials, the lack of enforcement and legal compliance on the various recruiting pitches, conference calls and videos, look at the ridiculous way in which their USA spoke hole Randy Crosby talks about the money and the cars, and the 1% and 2% for knuckleheads to become induced into spending the tens of thousands of dollars to ‘BUY A TEAM LEADER POSITION’ so they can share in a special set aside…
The idea, the management and the field marketers have only themselves to thank for making this projects imploding and demise…This is how it works kids…This is what you’ve created by your actions…so…WHAT DID YOU THINK WAS GOING TO HAPPEN?…
Oh, and trying to transfer out the millions in violation of the court order, that has now worked to get your regulators to become more aggressive.
The answer in their mind is “that’s what TelexFree promoters promised will happen. I saw the proof. I believe them.”
Turns out they’ve all been fooled.
God is on their side… the fat lady didn’t sing yet
Oh please!
Weren’t they using the big Brazilian statue of Jesus in their ads? I thought that would have made it legitimate.
Last scam that used Christ the Redeemer statue in their ad folded months ago. 🙂 (Look up “Profitable Sunrise”)
The statue is known as Christ the Redeemer. Its legitimate even if Telexfree was not.
Now in Telexfree page in Facebook – “promoters” try to call the international press:
One new video from Carlos Costa is coming in Facebook 😉
My faith is now shattered! What effect do you think clawbacks would have in Brazil. If they are demonstrating now, riots?
Now I’ve heard of god having a great sense of humor, and sending a fat lady to sing about TelexFree’s demise takes the cake in my book.
takaro is the new Pope
I would like to add what a huge and unexpected diappointment that is. I thought having a picture of that statue would legitimize any program.
Other Brazilian touristic points also appear in the video, such as Brasília Cathedral, Mineirão Stadium(in Belo Horizonte) and the São Paulo Arts Museum, that’s a common place for small demonstrations.
That claim didn’t work for AdSurfDaily when Andy Bowdoin made it. If TelexFree promoters are making this claim, it’s just another thing TelexFree has in common with ASD.
She did eventually — at least with respect to ASD.
For those unfamiliar with U.S. colloquialisms, there is an explanation on “fat lady sings” here:
http://en.wikipedia.org/wiki/It_ain%27t_over_till_the_fat_lady_sings
PPBlog
The telexfree God Carlos once sent to jail, will surely have a great time explaining to the inmates why he conned their families. Perhaps Carlos will have to learn the true meaning of the words “bending over”.
Did you really? You were obviously wrong.
Clawbacks will be on individual basis rather than collectively against a group. It’s very difficult to get large groups of net losers to engage emotionally in clawback claims against individual net winners.
You may potentially see some “personal riots” spread around in the country, or some “one person demonstrations” demanding “I want injustice!”.
Guys, new video (Brazilian Portuguese).
The end is “faith in god” 😀 Always god behind the Ponzi.
Why is that do you think?
And what did the Bible say about worshipping false prophets? Hmmm?
What, no Carlos Costa intro and only 2 minutes of video? With the assets frozen it appears production values over at TelexFree are slipping.
I suppose Costa not wearing a suit that isn’t clearly about a half foot short in the arms is something though (actually no, it still appears to short, he’s just wearing a shortsleeve shirt – put those hairy wrists away Costa!)
Google caption translate indicates the filing of an appeal later this week, as well as the signing of a contract with a consulting firm (like that will change the business model…).
Costa also reassures everyone that the company ‘will prove itself in court that it has done nothing illegal’, and that ‘things will take a bit longer because it’s really complicated’.
Right, an injunction granted and two appeals rejected based on evidence against the company presented by Public Prosecutors… exactly how many appeal denials do these guys need to be slapped in the face with?
And complicated? It’s quite simple really, you ran an obvious $20 a week guaranteed ROI Ponzi scheme and got busted. Game over, thanks for playing.
They can’t exactly come out and say: we’re s scam and we got all your money, suckers. 😉
Faith, dude, about believing in something that is not provable.
Update: It has now been revealed Federal Police in Brazil have opened their own investigation into TelexFree.
Looks the Federal Police with the help of numerous agencies are going to spearhead criminal proceedings against the company.
No worries though, I’m sure TelexFree have stockpiled enough paper and cartridge ink to keep pumping out those appeals.
http://zerohora.clicrbs.com.br/rs/economia/noticia/2013/07/policia-federal-vai-investigar-empresa-telexfree-4193742.html
a Rambo cosplay defending Telexfree.
Oh nice. Rambo fighting the forces of evil while waiting for his clothes to dry at the local laundromat.
Looking forward to watching Chuck Norris defending TF from the local cafe.
It sounds like you are saying that faith is behind ponzis not God is behind ponzis.
It’s interesting Yimpactus is trying to punt the responsibility to the US side.
According to a summary by Globo, Yimpactus claimed it doesn’t need a trade license to sell phone service in Brazil, and their explanation was they don’t sell anything, it’s actually sold by TelexFree US which is not in Brazil’s jurisdiction. (read the end of this link)
http://g1.globo.com/economia/noticia/2013/03/entenda-o-caso-telexfree.html
Check this out:
I believe there is absolutely no consulting firm signing with them. If anyone doubts he would be so daring to lie about this, it is probably because they don’t know about the insurance incident.
He really convinced lots of people it was possible to make an insurance to a 240% anual ROI. 240% with no risk!!!
Few days ago he announced an insurance contract with Mapfre was on its “last stages”. It was a Friday and, by Monday, Mapfre stated they had only recieved a proposition from Telexfree, but declined it.
Mapfre said they don’t even have, in their portfolio, an insurance in the characteristics proposed by Telexfree. They also threatened to sue TF for miss use of their name and brand.
Even so, Carlos Costa made another video, still saying the contract was almost ready. He advised the investors to stop using Mapfre’s brand when announcing this information through the web (they were really doing it), like if it was the only reason for Mapfre’s threat.
He also said the modality of insurance proposed was approved by Susep (regulatory agency), but Susep immediately denied it.
Rambo video uploads, rallies under bridges with people shouting at eachother…
The level of kool-aid consumption in Brazil must be astronomical.
Well… Without faith, Ponzi wouldn’t exist. People have to BELIEVE in the fictional facade of the Ponzi, even in face of all the evidence of it being merely a facade and they’re being defrauded. Much like Mulder in X-Files… “I want to believe.”
Do Brazilians dig Chuck Norris? Thought he’s purely American phenom. 🙂 Rambo’s universal. Even saw his T-shirt in Afghanistan. Rambo 3 still made him a hero there. 😀
Maybe Carlos Costa can put out a Rickroll video…
So they do, but fictional ponzi facades are erected by corruptible men and women not by gods.
I’m not even sure. I know Chuck is as old as the hills and given the popularity of mixed martial arts there, I’m certain there are a couple of Brazilians in TF who’ve watched his films.
Yes, specially among geeks, the Chuck Norris facts are widely-known here
look at this http://www.patrickpretty.com/2013/07/08/telexfree-affiliates-gave-adsurfdaily-like-coaching-tips-instructed-prospects-to-make-deposits-at-bank-of-america-and-to-copy-slips-to-team-leaders-gmail-address-for-expedited-service-t/
http://translate.google.com/translate?hl=en&sl=pt&tl=en&u=http%3A%2F%2Fwww.expressomt.com.br%2Fmatogrosso%2Fhomem-que-investiu-r-15-mil-na-telex-free-faz-denuncia-a-policia-69714.html
How stupid can stupid be?
According to the info on patrickpetty’s site, these telexfree people are now mass spamming facebook pages of NBC news,BBS, CNN,LA Times, Time magazine’s website, the Facebook sites of politicians and, apparently, the Facebook site of David Beckham.
As one reader comments; Some people just don’t know when to come in out of the rain. Talk about drawing a bulls-eye on yourself for the authorities. If they weren’t investigating, they sure will be now.
And, in blogs, social networks and videos, Telexfree affiliates reapeat again and again that the justice doesn’t haeve th e right to get involved in the companhy affairs, since no one inside the company was unsatisfied until the injuction froze the accounts.
They also are saying that the injunction is a strategy to make affiliates angry, so they will sue the company.
Once more, everything they claim comes prom th premisse that the problems start just when the company stops paying people, what’s obviously false.
Once as unsustainable model is adopted, sooner or later the system will collapse, and the more time the system runs, the bigger will be the losses when it collapses. Is it so hard to understand? Or do checks and luxurious cars turn off those people’s minds?
Chuck Norris is a meme in several blogs in Brazil. The Desciclopedia (Brazilian Uncyclopedia – satirical Wikipedia) is famous: http://desciclopedia.org/wiki/Chuck_Norris
Ah, the infamous “there was no victim until the government got involved” argument, previously advanced by Zeekheads.
A victim that doesn’t know he’s a victim, is a victim nonetheless.
http://amlmskeptic.blogspot.com/2012/09/pitfall-of-wishful-thinking-ignorance.html
And the corruptible men and women claim to be lead by God, but was really lead by a false prophet, so?
Well, Telexfree have a page in Desciclopedia too 😀
desciclopedia.ws/wiki/Telexfree
So?
People of religious faith and good intention can be foolish and wrong and greedy and dishonest. This is well known. This is not the fault of religion but in spite of it.
I don’t think we disagree that much. Fallen ones can exist with or without religion. Religion is just another “group vulnerability” to be tricked with affinity fraud.
At least they’re not as crazy as the Albanians. Look up “Albanian Lottery Uprising” when you have a chance.
When smuggling into neighboring Yugoslavia/Serbia was a its highest, people needed money to buy supplies to ship through, and promised HUGE returns (double your money in a week was actually offered).
Then the sanctions were lifted a ton of people lost their money (about 40% of Albanian economy by some estimates) and an armed uprising almost overthrew the government.
Oh dear. TelexFree have now filed their own injunction against the unanimous denial of their appeal on Monday.
I think someone over at TelexFree needs to go lookup the definition of “injunction”. And while they’re at it, “grasping at straws” too.
http://g1.globo.com/ac/acre/noticia/2013/07/advogados-da-telexfree-entram-com-acao-contra-decisao-da-justica.html
Yes, affinity groups are vulnerable, but this does not imply religious affinity groups are culpable as has been alleged, alluded to, and implied often enough recently that you would think that Carlos Costa was the Pope himself.
The country is 75% Catholic. Quite naturally the Telexfree participants ask for God’s guidance and blessings (as they doubtlessly do in every aspect of their lives.) This does not make Telexfree a Catholic conspiracy or “God’s ponzi.”
Never said they did. But both Ponzi and religion is powered by faith, which is kinda my point. So they kinda go hand-in-hand, when Ponzi often borrow credibility from religion.
The exploited to not go hand in hand with the exploiter.
The religious communities are a goldmine for scams because a good con just needs to get a foot in the door, then let human needs do the rest.
People need to believe and hope is a great button to push. People already want to believe in free, easy money, plus it provides it’s own means of keeping the victims from complaining.
The excuses about having faith and trusting would have more of an effect here, as well as the fact that there’s an expectation that a member of your church just wouldn’t intentionally hurt anyone in the group. It’s evil. It’s horrible. Well, you should always call a spade a spade.
You brought up a good point about culpability; I don’t believe religion is to blame either. It’s a cunning and insidious way of reaching their real targets: old people. Realistically, who else has 100,000 dollars lying around to invest? They have all the money, and sadly enough, they make the best victims.
People have a nasty habit of blaming the victim after something bad happens to them, and it’s dangerous for an elderly person to admit to being scammed, because they’ll end up in a nursing home, or be denied seeing their grand children, in a lot of cases. Relatives can be pretty vicious sometimes.
Actually, the elderly are the main audience of this site and realscam.com. You’ll see the same trend on the alexa ratings of all the sites of the ponzi/pyramids schemes. It’s because they’re looking to supplement their retirement income and they’re more trusting than younger people tend to be. At least when you open them up using a family member.
They grew up in a different time period where people wouldn’t cross that line…but as has been made tragically clear in the recent years, more frauds now than ever are willing to crush absolutely anyone with money, regardless of how vulnerable they are.
It’s the same with massive offline ponzi schemes and why there are specific laws against preying upon the elderly. They also might be starting to slip mentally, which makes it easier to rob them. That’s the reality.
I truly believe that the vast majority of the people putting the big money into any of these scams are retired little old ladies and grandpa’s. Mathematically, a ponzi wouldn’t last long without a big infusion of wealth. It can’t be kept up by just the ponzi players putting in $100 dollar test spends. They’re where the money comes from.
Using religion to scam is the same as using any other button people happen to have. It doesn’t really matter who it is or what group they belong to, as long as there’s money to be made from robbing them, a conman will try.
Scams like Telexfree and Profitable Sunrise (and many, many others) were able to achieve massive growth by rapaciously pillaging the religious communities, but it would have been just as easy to structure a ponzi for a nationality, political stance or what have you. As long as someone has a need or an emotional button to push, you have a window inside to rip them off.
Having a weakness isn’t necessarily a bad thing, it’s just that people should become aware of these things so they won’t fall victim to fraud.
Everyone is vulnerable, it’s just a matter of technique to get to them. Being non judgmental towards victims and accepting but patient about the pitfalls of human nature will go a long way towards eradicating these blights upon the economy.
It’s actually way worse than “any other button” in several regards.
* Most religions, by their very nature encourage more caring, trusting and, in the case of Christianity, “turn the other cheek” behaviour in their followers
* Once the fraudster/s have convinced victims that “God” is behind, or involved with the particular fraud, the victims are immediately placed into the position of not only having to accept their losses, but also to question the very fabric of their core religious belief/s.
The longer the fraud exists, the worse the after effects are for affinity fraud victims.
Generally speaking, victims of affinity fraud, particularly religion based affinity fraud are left in a far more “damaged” state after the inevitable collapse than the average man in the street victim.
Yeah. I was making the point that if religion didn’t exist, they would just find another avenue to scam someone from. So I don’t think religion is necessarily a bad thing just because affinity fraud exists.
You can measure the amount of money stolen from someone in numbers, but it’s impossible to measure the amount of pain and anguish you cause them when you do these kinds of things. What hurts more than being stabbed in the back by family? No question that it’s the most damaging type of fraud and can easily break a community. There’s no trust anymore after this happens.
This is an aspect I had not considered. It could be very faith shaking taking a person’s money, their friends and their beliefs at the same time.
Exactly. “Religious fraud”, i.e. defraud by invoking religion, a specific form of affinity fraud, shakes the foundation of trust to the core. If one cannot trust one allegedly of the faith, who can one really trust? That often leads to severe denial, as in “that person would NEVER cheat me… he’s my pastor!” and so on.
Yet there are MANY MANY documented cases of pastors and “social entrepreneurs” running Ponzi schemes by soliciting church members.
No, I am not saying religion leads to fraud. I am saying that religion is one avenue scammers use to scam people, and it’s a VULNERABILITY as both involves FAITH (i.e. believe in something WITHOUT evidence).
That’s well stated.
I believe most people in Telexfree to be protestants, not catholics. Even if not, I am quite sure the proportion of protestants in Telexfree is way higher than in the total of the Brazilian population.
I believe this for 3 reasons:
1. the proportion of protestants is way higher among the lower classess, which were more affected by the scheme
2. Several protestant priests were seen recomending Telexfree and forming their own pyramid among their followers.
3. Most catholics in Brazil are less religious than the protestants. Among other things, it means they are not church goers and do not share a community sense the same way the protestants do.
I don’t know any official research about it, but it would be no surprise if such a research states that, among the church goers, the protestants are the major religious group in Brazil, in spite of a 4 times larger catholic population.
This church going characteristic of the protestant population made them easy prey to corrupt priests. Their stronger community bonds also made it easier to spread the scheme among protestants.
Those are all good reasons. I might have guessed had I considered it longer.
I never knew protestant preachers were called “priests”.
Sorry, English is not my native language. In Portuguese, most people use “pastor”, which means shepherd.
Now I searched the google translator and was surprised to see the very same word is used in English, just with a different pronounciation.
By the way, here are some links of the close relation between Telexfree and protestant religious groups:
Pastor calls himself spokesman of Telexfree in Acre:
http://www.ac24horas.com/2013/07/02/perseguido-pelo-pt-pastor-ildson-viana-vira-porta-voz-do-telexfree-no-acre/
Another pastor calls for protesting in support of Telexfree:
http://diariodobrejo.com/pastor-convoca-divulgadores-da-telexfree-para-protesto-e-manda-recado-a-imprensa/
Evangelical congressman says Telexfree and BBOM (another pyramid) are divine opportunities for money making:
http://www.portaldenoticias.net/v3/deputado-evangelico-diz-que-a-telexfree-e-oportunidade-de-deus/
Website of “Gospel Funk” promotes the success of Telexfree investors, including 2 gospel funk singers:
http://batidaogospel.com/index.php/noticias/109-telexfreenoticia
Its ok by me, I got your meaning. There are protestant churches with priests of course (Church of England, Anglican, Episcopal and others) so its hard to generalize.
Thanks for the links. This is a real phenomenon.
I said I had no research, but now I found one:
http://g1.globo.com/jornada-mundial-da-juventude/2013/noticia/2013/07/populacao-catolica-cai-de-64-para-57-diz-datafolha.html
The catholic population is declining, with rises of non-religious and protestants. Pentecostal protestantism grows like a cancer in the poor commnunities of Brazil. In my opinion (not in the research) much of these new churchs are run by charlatans. They take at least 10% of the followers income.
The numbers of that research are decisive for what I said before, that Brazilian protestants are more religious and more vulnerable to scams like Telexfree.
For exemple, only 17% of catholics make religious activities (like church going) more than once a week, while 63% of pentecostal and 51% of non-pentecostal protestants do. 34% of catholics give money to church, while 52% of pentecostals do it, and they contribute, in average, with 3 times more money. 49% of the non-pentecostal contribute, and they pay, in average, even more.
The research also have questions about gay rights and abortion and, not surprise, catholics usually have an opinion way too different from their church directions, while protestants are the major force against those rights in Brazil.
Any way, reggardless of their religion, I have noticed that most Telexfree affiliates are much more religious than the average Brazilian, and that is relevant to understand the way the scam spread.
Simple affinity scam. Someone with same religion as me is more “trustworthy” than someone of a different religion (one reason I’m personally mostly non-religious).
When you have a chance, look up “Nanci Jo Fraser” in the US and her “Focus Up Ministries”, a front for Profitable Sunrise ponzi. She was just charged by the state attorney general with fraud.
She tried to change her ministry’s name, and had proudly claimed that she runs a Christian business. Good place to start is patrickpretty.com