TelexFree fined for acting in “bad faith”
There’s been somewhat of an ongoing dance taking place between TelexFree and the Brazilian court system.
TelexFree will typically make an announcement either on Facebook or YouTube about how they will undoubtedly crush anyone who opposes them with some new legal angle they are sure cannot fail.
After the courts bitchslap the company back into reality, another video or announcement appears, typically proclaiming the defeat as an overwhelming success or revealing a new ploy that, this time, will finally crush anyone who opposes them and also cannot fail.
This is pretty much how TelexFree’s communication to its affiliates has played out ever since Acre suspended the company’s Brazilian operations back in June.
Now, after some fifteen plus TelexFree appeals have been denied in various Brazilian courts, it appears that finally the Judge handling the Acre case might have had enough.
After declaring to world that “God used him to create TelexFree“, part company owner Carlos Costa appeared in another video surrounded by stacks of books:
Trying his best to look academic and convince TelexFree’s investors that he knew what he was talking about, Costa ranted on about how having lots and lots of books meant TelexFree wasn’t a Ponzi scheme.
Yeah, I’m not even going to try to dissect the logic fail there – but that’s pretty much the tone of TelexFree’s legal arguments these days.
Anyway, not impressed with Costa’s continued attempts to portray an alternative reality to TelexFree’s affiliates (who then parrot his misinformation to the rest of the world), Judge Thais Borges declared TelexFree’s latest appeal attempt was conducted in “bad faith”.
The appeal in question appears to be an appeal of an earlier decision made on yet another appeal TelexFree had filed. I have no idea what number appeal we’re up to now, but if I had to guess I’d say we hit the twenties not too long ago.
The original appeal was filed as a “motion to clarify”, which I believe pertains to the Acre injunction that prohibits TelexFree from recruiting new or paying out existing affiliate investors in Brazil.
TelexFree had initially argued that the injunction was invalid in their first “motion to clarify” appeal, but this was rejected by the court.
The second motion to clarify accused the first decision of being “silent and obscure”. Silent because the company claims there is a “lack of legal provisions” evident in the injunction decision, and obscure because ‘the sale of VOIP services was never banned‘ by the court.
TelexFree argue that they should still be able to sell VOIP services, but can’t because of their assets have been frozen. The company claims that because the injunction doesn’t instruct them on how they can continue to sell VOIP services despite the asset freeze, that the injunction should be overturned.
I suppose they might have a point with the “obscure” claim, but TelexFree never really sold VOIP services – so it’s a moot point to make.
Denying TelexFree’s second appeal in this matter, Judge Borges ruled that, while the courts did indeed not ban the sale of VOIP services by TelexFree, the courts never offered to provide TelexFree “solutions” to the “obstacles” it is now facing. As such there is “no reason” (basis) to claim there have been contradictions in legal decisions that have gone against TelexFree.
As for a lack of “legal provisions” behind the injunction, for some reason TelexFree had to have it pointed out to them that legal rulings are not made willy nilly – but entirely within the framework of the Brazilian legal system.
On both accounts Judge Borges dismissed TelexFree’s second “motion to clarify” appeal, ruling that it was filed with a “clear intent to procrastinate”.
Judge Borges went on to state that TelexFree was guilty of acting in “bad faith”, by ‘repeatedly filing unfounded litigation with the aim of procrastination’. For their efforts to delay the case, TelexFree were fined 1% of the relief claim they made in their motion, which amounted to R$10,000 ($4200 USD).
Judge Borges has also requested TelexFree hand over all the data it claimed was in Carlos Costa’s YouTube video books, ‘data relating to the registration and operation of the accounts of each of the affiliates, posted by the company (on YouTube), including twelve months of retroactive data‘, within ten days.
Of note is the explicit order that TelexFree comply with this request, irrespective of any holidays that fall within the ten-day period (Christmas and New Years).
Considering the peculiarity of the case, which concerns the collective interest of hundreds of thousands of people across the country, there is a need to press the highest degree of urgency in processing this request.
On the same deadline, the defendant company (TelexFree) must also inform the court which “datacenter” it stores the company’s website and data relating to the registration and transaction of affiliate accounts, providing to the court the password to access the database, which can be routed through private correspondence, addressed to me (Judge Borges).
There are also an additional rulings evident in the court’s press release which, as far as I can tell, pertains to instructing TelexFree affiliates who have filed their own appeals and requests to intervene in the Acre case to wait until the case has been resolved (legal action filed by TelexFree affiliates cannot be decided upon separately).
The news reported that hundreds of (TelexFree) affiliates attended rallies in several cities around the country, seeking the resume of TelexFree’s business activities.
Therefore, if even a small percentage of these affiliates wish to pursue individual legal action, there will be great turmoil in a case that has already exceeded forty thousand pages (of evidence), damaging it and (delaying) a speedy adjudication.
No surprises there as, let’s face it, these affiliates are only trying to get the Ponzi ROIs they believe they’re entitled to.
Looking forward, ten days puts us at early January. I’m not sure of the exact date as there’s no publication date on the court’s press-release (although I believe it was released only in the last few days).
Will TelexFree be able to deliver or was Carlos Costa just sitting around with a bunch of empty books? Going by Judge Borges tone, it’s probably wise TelexFree don’t miss the set deadline.
Ditto filing any more silly appeals…