A Brazilian judge has frozen the assets of BBOM and its management, declaring the company's business model a Ponzi scheme. The decision followed an investigation by Federal Police in Pernambuco, which found participants received compensation solely for recruiting new members, not from product sales.

BBOM accepted investments from affiliates, promising a monthly return on investment. It also paid recruitment commissions and matching bonuses. Much like TelexFree, which used VOIP services as a front, BBOM claimed to sell GPS services through a company named Embrasystem.

The company paid out investor returns as soon as affiliates handed over their money. This happened regardless of any actual GPS system sales through Embrasystem. Federal Police in Pernambuco launched their investigation after these discrepancies became clear.

Less than a month after the initial announcement, police presented evidence to a judge. The judge then ordered the freezing of BBOM's and its management's assets. After reviewing the documentation from federal prosecutors, the judge determined there was clear evidence BBOM operated as a Ponzi scheme.

Business sustainability for BBOM depended entirely on payments from new members. The National Telecommunications Agency (Anatel), which licenses GPS device sellers, had not authorized EMBRASYSTEM, BBOM, or UNEPXMIL to sell such products.

Following the court decision, Ednaldo Bispo, BBOM's Director, told reporters he had not yet seen the ruling. He stated, "Despite these irregularities the company's payments to its promoters will continue normally." Bispo suggested their business model "was not properly explained" and called it "a great opportunity to show how BBOM works."

BBOM's model involved affiliates paying $300, $900, or $1500. The company then paid them $80, $240, or $400 per month, based on their investment. Judge Luciana Laurenti Gheller, substitute in the 4th Federal Goiânia, stated that payments to each participating affiliate "depends exclusively on the recruitment of new affiliates." BBOM charged membership fees starting from £600.