Brazilian Federal Police are tightening the noose around TelexFree, the cryptocurrency-backed scheme that promised instant riches to recruits. A second wave of raids just hit the company's operations, and this time regulators are going after the money itself.

Operation Orion began in July when federal authorities descended on TelexFree's Brazilian headquarters in Espírito Santo and properties across the state. Yesterday, investigators returned with fresh warrants. Four separate raids swept through TelexFree's main office in Espírito Santo and three homes in Vitória and Vila Velha. Twenty federal police officers and twelve investigators from the Receita Federal—Brazil's IRS equivalent—led the operation.

The company's lawyer, Horst Fuchs, told Globo he was out of town and knew nothing about the raids. That didn't stop the investigation.

TelexFree's founders Carlos Costa and Carlos Wanzeler remain in the region, though Wanzeler is actively fleeing US regulators. Costa hasn't been charged yet. Sann Rodrigues, the scheme's biggest investor, is also believed to be hiding in Espírito Santo. The SEC is already suing Rodrigues, and the Massachusetts Securities Division has opened its own investigation into his conduct.

The operation just got sharper. On October 24th, a Federal Court in Brazil issued a sweeping order freezing bank accounts and assets connected to TelexFree. The court stripped banking and tax privacy protections from one company and six individuals tied to the scheme in Espírito Santo. Federal prosecutors in the state requested the action after July's first phase of Operation Orion turned up documents proving more people were involved in running the pyramid scheme than initially suspected.

The second phase hit Friday. Authorities won't release names yet—the investigation is sealed and ongoing.

🤖 Quick Answer

What is Operation Orion targeting in the TelexFree investigation?
Operation Orion is a Brazilian Federal Police operation targeting TelexFree, a cryptocurrency-backed pyramid scheme. Launched in July, it focuses on the company's financial operations through raids on headquarters in Espírito Santo and properties in Vitória and Vila Velha, involving federal police and tax authority investigators.

How many raids were conducted in the second wave of the TelexFree investigation?
The second wave consisted of four separate raids. Twenty federal police officers and twelve investigators from Brazil's Federal Revenue Service (Receita Federal) participated in the operations targeting TelexFree's main office and three residential properties in the Espírito Santo region.

What type of scheme was TelexFree operating?
TelexFree operated as a cryptocurrency-backed pyramid scheme promising rapid financial returns to recruits. The

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