TelexFree is not shut down in Brazil, there’s a lot of news there, it’s liar (sic). Everything you hear from news, it’s not true.

Our company, everything is ok.

Nothing will affect the US. Please continue your continued dedication, this company will persevere.

-Carlos Wanzeler (TelexFree owner, now a fugitive), June 2013

To the very bitter end, TelexFree maintained it was not a Ponzi scheme.

Indeed, down in Brazil and despite all evidence to the contrary, today Carlos Costa (also an owner of TelexFree) still insists that the company is legitimate.

TelexFree (under the name Ympactus) was
shut down in Brazil via injunction back in June of 2013
. The injunction, granted in the Brazilian state of Acre, prompted Carlos Wanzeler to get on an affiliate phonecall and
make the statements quoted above
.

TelexFree used the same
Ponzi business model
in Brazil as it did in the US. Naturally this raised questions over the legal status of the company in the US.

Unknown publicly at the time, US regulators had already began investigating the scheme
as far back as April 2013
.

While the SEC quietly continued to investigate the company, TelexFree management sought out legal opinions to ascertain the legal status of Ponzi schemes in the US.

At the time TelexFree had already retained Gerry Nehra (Nehra & Waak), who wrote to BehindMLM in February 2013 and
demanded we take down our analysis of the company
.

None the less and for reasons they haven’t made public, TelexFree corporate sought additional legal input as to the status of their business model in the US.

These revelations are part of a recent filing made by court-appointed Chapter 11 Trustee Stephen Darr. Darr revealed this new information in an opposition filed against the payment of fees to the law firm Gordon Silver.

Gordon Silver are currently
trying to wrangle payment for services they performed for TelexFree
as part of their efforts to circumvent regulatory action via bankruptcy proceedings.

In August of 2013, Jeffery Babner

of Babener & Associates, an attorney retained by the Debtors who claimed to have extensive MLM experience,
advised the Debtors that their business plan constituted a pyramid scheme.

When TelexFree first retained Babener and when they might have stopped retaining him is unclear.

Regardless, despite Babener’s legal advice, TelexFree continued on business as normal.

Gerry Nehra would go on to give TelexFree his “
legal blessing
” in August of 2013, so he was obviously of the legal opinion that TelexFree was a legitimate enterprise.

Around this time TelexFree engaged two additional law firms.

In late summer or early fall of 2013, the Debtors retained The Sheffield Group (“Sheffield”), a consulting firm with extensive MLM experience, to ostensibly revise their business plan so that it would comply with applicable laws.

In late summer or early fall of 2013, the Debtors retained Robert Weaver (“Weaver”), an attorney with extensive white collar crime expertise, a

🤖 Quick Answer

Was TelexFree operating legally in Brazil in 2013?
No. TelexFree was shut down in Brazil via injunction in June 2013 by authorities in the state of Acre. Despite the company's claims of legitimacy, regulatory action was taken against its operations, indicating regulatory concerns about its business model.

What did TelexFree's owners claim about the company's status?
TelexFree owners denied pyramid scheme allegations and claimed the company was legitimate and operating normally. They insisted that news reports were false and that operations would continue unaffected in the United States.

How did TelexFree respond to regulatory action?
TelexFree maintained claims of legitimacy despite evidence to the contrary. Owner Carlos Wanzeler made statements on affiliate calls asserting the company would persevere, while co-owner Carlos Costa later continued insisting the company was legitimate despite

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