TelexFree lost its injunction appeal early this morning, with the Court of Acre upholding its decision to block payments and new publisher access. Judge Samoel Evangelista of the 2nd Civil Chamber issued the ruling, which applies throughout Brazil and internationally. This outcome directly contradicted anonymous reports that circulated over the weekend, falsely claiming TelexFree had won its appeal.

The company now has five days to file a second appeal. However, this rejection marks the second time a court has ruled against TelexFree based on evidence presented by public prosecutors. A second appeal appears unlikely to succeed, and even more unlikely to be granted by the judiciary if filed.

Attention now shifts to the Acre Public Prosecutor's Office. They are expected to file a criminal case against TelexFree within 30 days of the original injunction granted last week. Two judges have already signed off on injunctions, suggesting a strong case against the company on Ponzi scheme charges.

Judge Thais Kalil previously noted how TelexFree structured its earnings. Adding new publishers to the network held more importance than selling the VoIP product itself.

"The issue is that the earnings will be exhausted when the main source of revenue of the group (new affiliate registrations) stops," Judge Kalil wrote. "Many (affiliates) do not even have the opportunity to recover their initial investment (minimum U.S. $339) and this is detrimental."

TelexFree's defense has relied on the existence of its VoIP product. The company appears to believe that paying existing investors with new investor money is acceptable if a product is part of the business model. This argument has not held up in court.

Carlos Costa, TelexFree's Director of Marketing, announced in a YouTube video that TelexFree had placed its "faith in god." This spiritual defense also failed to sway the court. Acre Public Prosecutors have labeled TelexFree "the greatest scam in the history of Brazil."

Horst Fuchs, TelexFree's lawyer, recently stated the company had over 600,000 affiliates globally. Approximately 70,000 of these affiliates reside in the Brazilian state of Acre, where the initial injunction against the company was granted.

Carlos Costa also faced scrutiny for making false claims about rumored investment insurance agreements. Shortly after the Acre injunction was granted, Costa appeared in another YouTube video, suggesting the company had secured such agreements. This appears to have been a marketing stunt that has now backfired.