Author: Luis Nassif
The Telexfree case is a classical pyramid scheme, defined by the Brazlian Penal Code as a form of estelionato: “the crime committed by one who sells, mortgages, or concedes something already sold, mortaged, or conceded, while concealing that fact.”
Luis Nassif finds it suspicious that a magazine of the caliber of Exame would seem to defend the “business.” But does it? According to an ealier article by Nassif, “Exame magazine endorses confidence game.”
Years ago, the bingo racketeers ordered a major newsweekly to publish an article that legitimated its activities. The price paid by the magazine was a steep one: the loss reader confidence.
I knew that Abril was having problems, but the endorsement by Exame — its bestselling business title — of a pyramid scheme is something never seen before.
In a series of acritical articles, TelexFREE executives present themselves in terms of the theology of prosperity.
THe more recent Nassif is even more strident:
News organizations that defend the scheme have three strategies for defending the scheme: disinformation; acquaintances who fell for the scheme and must recover their money; and bribery.
Knowing that the company has taken in more than R$ 1 billion from the scheme and has resorted to all sorts of manipulations, the Ministry of Justice has lost its capacity to act, as befits the treatment of an entity that has accumulated considerable power and influence.
Only this can explain the attempt by Exame magazine to legitimate the confidence game, treating it as a conventional commercial activity.
A sidebar to the story presents testimonials to the company, both positive and negative.
“What they have done agaist this company is a crying shame, an arbitrary act, an act of insanity. If anyone knows what to do with my money, it is me. The State should not be sticking its nose in” –Sandro Rocha, actor
The selection appears to be a balanced one, encompassing authorities, promoters and plaintiffs.
But Nassif remains indignant:
In an article published today — September 21 –, the magazine argues that the court-supervised reorganization of Telexfree is a sufficient condition to permit it to resume operations.
This is a serious matter. We are talking about the most respected businesss publication in Brazil. It cannot plead ignorance of the scheme, especially after suffering harsh criticism for previous articles in the same vein.
Recent favorable coverage of Telexfree by the “traditional press” has few examples of the tragic coverage of Telexfree. These range from favorable articles bought and paid for by bingo racketeers or, at most, entering into agreements not to publish accusations.
What TelexFREE has to gain by a court-supervised reorganization.
With the work begun by the police and courts of Acre –which has no deadline — the company opens a window that may allow it to return to business
TelexFREE workers have petitioned to unblock their assets; after losing more than 10 appeals in the state high court of Acre, the federal court of appeals and the Supreme Court, the company wants to return to its activities with the restrictions imposed by a court-ordered bankruptcy.
São Paulo – It may seem strange to celebrate a petition for bankruptcy –used to try to save companies who have already bottomed out –but the optimism on displaythis Friday with a statement from TelexFREE partner Carlos Costa, shows what the company seeks to accomplish with the maneuver: onblock its own funds and return to functioning normally.
In a recent video, Carlos Costa said the petition is the “right to life” of the company and that a court-supervised repayment plan would be “marvelous.”
In the legal sense, according to specialists interviewed by EXAME, the plan has a real chance of working.
The process of court-supervised recovery — which precedes, and attempts to avoid, the failure of a company — presupposes that the company is functioning, that it is protected from its accumulated debt and can recover its profitability and pay its debts according to a schedule that will not lead it to bankruptcy.
This would be posssible only if the assets are released from the order to block them in effect since June 18 as ruled by Judge Thaís Khalil,
But because the petition in question is being filed in Espírito Santo, if the judge who assumes the case in that state finds that TelexFREE has the right to a judicial recovery and there is no consensus among the magistrates, the case could end up in some drawer in Brasília, which has afforded precedence to the case affecting TelexFREE.
“If this happens, the federal appeals court (STJ) will determine which judge should adjudicate the issue. The STJ tends to do so in urgent cases and to rule in favor of the bankruptcy judge,” says attorney Luiz Fernando Paiva, a bankruptcy specialist at the law firm of Pinheiro Neto Advogados.
The petition for a court-supervised restructuring of TelexFREE was received by a bankruptcy court inVitória (ES) last Thursday. Now, the judge in charge of the case will decide whether to accept it or not. As decisions of this sort are normally arrived at rapidly, it is possible the response may arrive as early as next week.
In this case, TelexFREE will have 60 days to elaborate a plan for repaying its debts to creditors.
In this Friday statement, Carlos Costa did not specify the extent of these debts, or who exactly these creditors are. No matter who they are – banks, the federal tax authority or various suppliers — they have 30 days after the deadline set for TelexFREE to notify whether they accept the terms or not.
Throughout this period, the company can only sell off assets with the authorization of the presiding judge.
And what happens to the distributors of the scheme [ast the base of the pyramid]?
TelexFREE is accused by prosecutors of practicing a fnancial pyramids cheme. That is, it maintained its company not from the sale of products — which it claims are VoIP internet telephone plans — but from the money received from new associates who pay rates that guarantee the profits to recruiters for the scheme.
Again according to Exame, there are, along with TelexFREE, 80 companies involved in the investigation of the scheme.
It might be interesting to compare the case with the notorious D.M.G. pyramid in Colombia.
In the meantime, the TelexFREE scheme seems to attract religious persons drawn to the theology of prosperity, although IURD has also companied of the scheme.
Filed under: Brazil