TelexFree lost its tenth appeal in a Brazilian court, as a panel of judges in Acre unanimously upheld an injunction against the company. This decision effectively ends the scheme's attempts to resume operations in Brazil, following nine previous appeal denials.
The hearing was an interlocutory session. It aimed to decide if the injunction barring TelexFree from paying commissions and recruiting new investors should be lifted.
Public Prosecutor William Silvia requested to be excused from the hearing. He cited a possible conflict of interest, as some of his family had invested in TelexFree. Alvaro Pereira then represented the Public Prosecutor's Office.
After hearing arguments from both sides, the panel of judges denied the company relief. They unanimously upheld the injunction against TelexFree.
The judges offered blunt assessments of TelexFree. Judge Samoel Evangelista stated the scheme has a short life. He noted that selling VOIP is not the primary activity for those who join the company. Instead, recruitment of new affiliates drives the operation.
"The company's entire advertising effort is designed not to promote the product but to attract new affiliates," Evangelista explained. Federal Judge Valdirene Cordeiro also voted against the appeal. He said that "all that has been publicized in the media and presented in the (Public Prosecutor's) file confirms the existence of a pyramid scheme."
Judge Eva Evangelista expressed compassion for TelexFree affiliates. "I feel a sense of compassion towards the people who sold their only home and only car on the promise of easy money," she remarked.
This situation, she suggested, should be assessed through further civil action. Compensation would depend on the amount invested by each individual.
TelexFree maintains the option to file an appeal in the Superior Court. However, this move appears unlikely to succeed given the string of previous denials.
The question of TelexFree resuming business operations in Brazil now appears closed. Recovery efforts will likely focus on identifying funds to return to affiliates who lost money in the scheme.