TelexFree slapped with $130 million tax penalty
Following a ruling late last year certifying TelexFree a Ponzi scheme in Brazil, things have been pretty quiet down there.
From filings in the US cases, we know that Brazilian and US authorities are cooperating behind the scenes with their various investigations.
One of the Brazilian agencies investigating TelexFree is the IRS, who claim TelexFree’s owners owe them at least $130 million.
If you’re wondering how a Ponzi scheme racks up such a large tax bill, the $130 million figure was arrived at upon consideration of interest and criminal penalties.
The IRS investigation was conducted as part of Operation Orion, launched just under two years ago. In addition to the IRS’ $130 million claim, there are purportedly another four tax-related matters pending in court.
Seeking to recover the funds, the IRS took the matter to court and won a judgement back in February. It appears however that the case was only unsealed last week.
According to Gazeta Online,
Carlos Costa, Carlos Wanzeler and James Merrill have 30 days to pay off the debt through cash deposit, bank guarantee, submitting assets for seizure or surrendering third-party assets.
I believe the 30 day deadline kicks in from the date the case was unsealed by the court last week, which would be early May.
If Costa, Wanzeler and Merrill don’t pay up (and let’s be realistic, they probably wont), the IRS will recoup the penalties from funds seized via an injunction granted in the Brazilian state of Acre.
Personally I think those funds should be reserved for paying out victims of the scheme, with payment of the tax bill required by Costa, Wanzeler and Merril alone. This is their mess, so why should victims foot the bill?
Obviously there’s a question of whether the trio can pay – but if they can’t, start seizing assets. And if that doesn’t satisfy $130 million, start making arrests.
According to the lawyer Horst Vilmar Fuchs, the company will appeal the decision.
What with TelexFree pretty much losing every appeal they’ve filed in Brazil, good luck with that.
I’d like the government to get the money as long as they dedicate it’s use to educating the public about recruitment based opportunities.
I’ve been suggesting for a while that recovered funds be used for this purpose. This seems like the perfect compromise. Apply to ‘tax’ money to education, then dispense the remainder to ‘net losers’ without a prior history of other claims.
…’disperse’ the remainder.
If we don’t already have one, I hope the governments have a database of names collected from all the busted schemes.
Yes, this might discourage people from making claims to the receivers. That’s good. Repeat offenders don’t deserve to be treated as ‘victims’ anyway.