A mediation settlement conference between TelexFree and Acre's Public Prosecutors concluded without agreement yesterday. Prosecutors had previously stated they would accept nothing less than the company's dissolution and the immediate return of invested funds to participants.

Prosecutors also presented a business model for TelexFree. This model involved affiliates selling Voice over Internet Protocol (VOIP) services to retail customers, earning commissions on each sale. The plan required TelexFree to first refund all money invested by its affiliates.

TelexFree rejected this proposal, unwilling to abandon its established system. Carlos Costa, a company representative, then offered two alternatives. His first suggestion involved the continued operation of TelexFree, which is registered as Ympactus in Brazil.

Costa's second proposal requested a restart of TelexFree's Brazilian operations, but only to honor existing 52-week investment contracts. After these contracts concluded, Brazilian affiliates would need to re-register with the company through its US operations. This plan suggests Costa believes US regulators would tolerate a company collecting hundreds of dollars from affiliates to pay $20 weekly returns from new deposits, purportedly for online ad placement. It also indicated the company's readiness to officially withdraw from Brazil, its largest affiliate market.

Acre's Public Prosecutors rejected both of Costa's proposals. Now, Judge Thais Borges will decide on these alternatives. The decision is expected within ten days.

A ruling in favor of TelexFree could effectively legalize Ponzi schemes in Brazil. A decision against the company would allow the broader legal case against TelexFree to proceed. Judge Borges has indicated that due to the case's scale, a final decision might not come until next year.

At least one Brazilian judge has openly called TelexFree a "pyramid scheme" in court proceedings.

Separately, a civil case brought by a TelexFree affiliate was dismissed yesterday for "lack of jurisdiction." Judge Menez, in her decision, stated there is "strong evidence of the existence of a financial pyramid, formalized in the contract between the parties."