Authorities in Brazil shut down BBOM, another pyramid scheme

According to The Gazette in Brazil, the courts in Brazil must be working overtime, as they just shut down BBOM, a suspected financial pyramid scheme. It’s only a few weeks ago that another court shut down TelexFree, a suspected financial pyramid scheme.

Substitute federal judge in 4th District Court of Goiânia obeyed request by federal prosecutors in preparation injunction and ordered the blocking of assets of the company Embrasystem – Technology Systems, Import and Export Ltd., known by the trade names “BBom” and “Unepxmil , “and the company BBrasil and Organizations Ltda methods, as well as the assets of the owners of these businesses partners.

By analyzing the documentation gathered by federal prosecutors, the judge considered that there was robust evidence that the business model operated by BBOM it is actually a “financial pyramid” prohibited practice in Brazil and a crime against popular economy. ‘s decision traces, first, the differences between the business model called “MLM” or “network marketing”, and the coup known as “financial pyramid”. ‘s “multilevel marketing” comes from sustainable business model constituting a legal practice. According to the decision, it is a business model in which the member of the network can have both financial gains due to the sale of products or services that performs as through recruitment of other vendors, and if so, its revenues will be proportional to the revenue generated by sales of the members of your network.In multilevel marketing, billing is calculated on product sales. 

The sale of the product, therefore, is the basis of business sustainability. already in the scheme called “financial pyramid”, participants are compensated only for referring others to the system, without regard to the actual generation of product sales. No, in this case, business sustainability, as it is based solely on payments made ​​by the members. And at some point, it becomes mathematically impossible to attract new participants to the network, and the younger participants end up being harmed. Upon drawing this distinction, the judge reasoned that the system adopted by BBOM stakeholders join forces upon payment of a Registration fee (R $ 60.00) and a value of membership varies depending on the plan chosen (bronze – R $ 600,00, silver-or gold R $ 1,800.00 – $ 3,000.00), forcing to attract new members and pay a mandatory monthly fee of R $ 80,00 for a period of 36 months. Have mechanisms awards or bonus promised by BBOM associates, are calculated on the accession of new members who have been nominated by the member. 

The more participants the member can bring to the network, the greater the reward promised. As identified by the judge, the payment of participants depends exclusively on the recruitment of new members made ​​it. The “sustainability” of the business does not come from income generated by the sale of the product under supposedly the franchise, it is a crawler. At this point, the decision calls attention to the fact that, as clarification made ​​by the National Telecommunications Agency (Anatel) , the tracker used in vehicles is a telecommunications station that needs to be licensed by the agency, and was not granted permission by Anatel to EMBRASYSTEM company, known for BBOM or UNEPXMIL to work with this type of product. Finally, the judge says deferred the measure aims to protect the interests of the new members BBOM system, which constitute the basis of the “pyramid”, ie, most associated, as in the case of “breaking” of the company are those people who will be harmed. Downtime goods required by federal prosecutors seeking to avoid squandering the equity of the company to enable future compensation to aggrieved consumers. 

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