Brazil's state of Acre faces a court order to pay R$500,000 in the ongoing TelexFree case. This sum covers the costs for expert analysis in the legal battle against the alleged Ponzi scheme, a development that has raised questions about the company's litigation tactics.
TelexFree owners appear to view this payment as a strategic leverage point. They hope the case against them will be dismissed if Acre, one of Brazil's poorer states, refuses to cover the bill. Carlos Costa, a TelexFree owner, commented on the situation, acknowledging recent floods left many in Acre homeless. "I do not believe the governor (of Acre) will authorize this payment," Costa stated, "because he will be making the people of Acre pay for a private company to make a case against another private company."
TelexFree has faced significant legal setbacks. The company has recorded over twenty court defeats and received multiple fines for acting in bad faith. Their new tactic appears to target government finances, given their past legal struggles.
The case against TelexFree has reached the "expertise" stage. This means one or more experts will provide evidence to support claims that TelexFree operates as a Ponzi scheme. Typically, defendants bear these costs.
Last year, however, TelexFree filed an appeal. The company argued its blocked assets prevented payment. Judge Thais Borges agreed, ordering the plaintiffs to pay for the expertise. Brazilian law exempts the Public Ministry of Acre, an autonomous body, from paying fees for expertise in civil suits. The financial burden then shifted to the state.
TelexFree was aware of these legal provisions when they filed their appeal. They are counting on the state's refusal to pay.
The state of Acre responded to a recent deadline for the expertise payment. They announced an appeal against Judge Borges' decision. Leonardo Silva Rosa Cesario, chief prosecutor for the Acre Attorney General's Office, told iG that "The Government can not be held responsible for these fees, because it is not party to the proceedings and did not have the chance to speak about it earlier."
A recent revelation casts doubt on TelexFree's financial claims. Just under two weeks ago, Carlos Costa disclosed in a YouTube video that the Espirito Santo IRS had fined the company R$70 million for unpaid taxes. Costa, in the video, waved tax bank receipts and emphasized the speed with which TelexFree paid this substantial fine.
This raises a question: How did TelexFree pay R$70 million so quickly if its assets are supposedly blocked? The company claims it lacks access to R$500,000 for expertise fees, yet it produced R$70 million for a tax fine. The numbers do not align.
Failing to pay the R$500,000 and potentially holding the Acre government hostage to get the case dismissed serves TelexFree's interests. Paying the IRS, however, avoids further government penalties while maintaining the narrative of blocked assets for the civil suit. This appears to be a calculated legal maneuver.
