The House select committee on pyramid schemes approved its final report on Monday — recommending the investigation of 45 people for several financial crimes, including retired football star Ronaldinho Gaúcho.
Created in June, the committee initially focused on cryptocurrency scandals. However, after major travel platform 123milhas canceled thousands of trips and later filed for bankruptcy protection, lawmakers also set their aims at the company.
The report by Congressman Ricardo Silva says that one of 123milhas’s promotional lines “likely” functioned as a “pyramid or Ponzi scheme, in which the value obtained with new purchases was used to issue tickets for earlier clients, and, of course, to enrich the owners, until the scheme collapsed.”
In the so-called ‘Promo Line,’ clients chose a time period rather than specific dates when purchasing plane tickets. In exchange for this flexibility, they were offered rates 20 to 35 percent lower than market prices, as Ramiro Madureira, one of 123milhas’s owners, testified before the select committee.
Per Congressman Silva, this business practice was “absolutely dependent” on variables not under the control of the company, such as fuel and ticket prices. The company also heavily borrowed from major banks and frequently resorted to accounts receivable financing, which further degraded its financial health.
Mr....
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