On March 30, 2026, Brazil's National Council of Justice (CNJ) ordered the immediate, indefinite suspension of Judge Alexandre Victor de Carvalho from the Court of Justice of Minas Gerais. Federal Police officers conducted searches at his office in Belo Horizonte. The reason: suspected favoritism in handling the judicial recovery of the 123 Milhas Group, a travel company whose collapse left more than 800,000 creditors holding worthless tickets and broken promises.
This is the second time Carvalho has been removed from the case. The first suspension, in December 2024, lasted 60 days. This time, there is no end date.
For international investors and anyone studying risk, the 123 Milhas saga is a textbook case of what happens when a "too good to be true" business model meets insufficient oversight. The parallels to other consumer fraud cases worldwide make the lessons universally applicable.
What was 123 Milhas
123 Milhas was a Brazilian travel platform that operated as a middleman between airlines and consumers. The company purchased airline miles and tickets in bulk, then resold them at discounted prices. The core model was not inherently fraudulent. What made it collapse was a specific product: the Linha Promo (Promo Line).
Launched during Black Friday 2021, the Promo Line sold airline tickets with flexible dates at prices 30% to 50% below market rates. Customers selected a travel window, and 123 Milhas committed to issuing the ticket up to three months later. The company bet that ticket prices would drop during that interval. When they did not, losses accumulated.
Between June 2022 and August 2023, the Promo Line racked up R$ 835 million (approximately US$ 145 million) in losses. The cost of acquiring tickets consistently exceeded what customers had paid. The company began using funds from new customers to cover obligations to existing ones, a classic Ponzi dynamic.
Timeline of the collapse
Black Friday 2021: Launch of the Promo Line, offering flexible-date tickets at prices well below market rates.
August 2022: Procon-SP (Sao Paulo's consumer protection agency) issues a formal notification for non-delivery of tickets and accommodation vouchers. Early warning signs are public.
June 2022 to August 2023: The Promo Line accumulates R$ 835 million in operational losses. The model becomes unsustainable.
August 18, 2023: 123 Milhas suspends all Promo Line ticket issuances and flexible-date packages. Trips already booked for September through December are canceled. Hundreds of thousands of consumers are left without flights or refunds.
August 29, 2023: The company files for judicial recovery (Brazil's equivalent of Chapter 11), declaring R$ 2.3 billion in debts across more than 800,000 creditors, most of them individual consumers.
December 2024: The Public Ministry of Minas Gerais (MPMG) charges five members of the Madureira family, who controlled the group, with consumer fraud, bankruptcy fraud, and money laundering. Maximum potential sentences: 30 years. The MPMG requests R$ 1.1 billion in material damages and R$ 300 million in collective moral damages. The Court of Justice accepts the charges; the defendants become formal accused.
December 2024: The judicial recovery plan is filed, offering creditors three options: full-value credits for future purchases on the platform, a 40% discount on owed amounts paid in semi-annual installments over six years (with an 18-month grace period), or a capped settlement of up to R$ 450 paid over five years (with a 2.5-year grace period). Creditors who accept waive their right to sue.
February 2026: 123 Milhas begins sending settlement proposals to its 800,000 creditors. Acceptance is optional but irrevocable once signed.
March 30, 2026: The CNJ suspends Judge Carvalho for the second time, indefinitely, over suspected favoritism in the judicial recovery proceedings.
Why this matters beyond Brazil
The 123 Milhas case shares structural characteristics with consumer fraud cases worldwide. The mechanics are remarkably similar to those seen in the WOW Air collapse in Iceland (2019), the Thomas Cook bankruptcy in the UK (2019), and the Hurb crisis in Brazil (ongoing). In each case, a travel company sold services at unsustainable prices, funded current obligations with future revenue, and collapsed when the cash flow inverted.
The difference with 123 Milhas is scale: 800,000 creditors, R$ 2.4 billion in estimated fraud, and a judicial process now tainted by allegations of judicial corruption.
For investors, this pattern is not unique to travel. It appears in any industry where companies sell future commitments at below-cost prices to acquire customers rapidly. The warning signs are consistent: aggressive pricing that defies margin logic, rapid customer growth funded by forward revenue, and governance structures that concentrate control within a small group.
The numbers
| Data point | Value |
|---|---|
| Declared debt | R$ 2.3 billion (~US$ 400 million) |
| Promo Line losses | R$ 835 million (~US$ 145 million) |
| Creditors affected | 800,000+ |
| Material damages requested by prosecutors | R$ 1.1 billion |
| Collective moral damages requested | R$ 300 million |
| Total estimated fraud | R$ 2.4 billion |
| Maximum sentence for defendants | 30 years |
The best repayment option for consumers means a 40% haircut and a timeline of nearly eight years. A creditor owed R$ 1,000 might receive R$ 600, spread over six years starting in 2027. Adjusted for inflation, the real recovery will be significantly less.
Risk lessons that apply to any market
1. Due diligence applies to every financial decision
Most people associate due diligence with stocks and bonds. But the 123 Milhas case demonstrates that risk assessment applies to any financial commitment, including where you buy a plane ticket.
The signs were public: rising complaints on consumer review platforms, a formal notification from Procon-SP in 2022, a business model dependent on unpredictable future pricing. None of these individually proved fraud. Together, they painted a picture of a company under extreme stress.
Before concentrating capital in any platform, service, or asset, ask the basic questions. Where does the return come from? Is the model sustainable if conditions change? What do public reviews and complaints look like?
2. Judicial recovery protects the company, not the creditor
Many 123 Milhas customers learned the hard way that judicial recovery exists to give the company time to restructure, not to guarantee creditors receive full value.
The three settlement options offered in February 2026 illustrate this clearly. The best option involves a 40% haircut and a nearly eight-year timeline. Creditors who accept waive their right to legal action. Those who decline go to the General Assembly, whose outcome is uncertain.
In our previous post on Americanas, we covered how the company exited judicial recovery but its shares remain 50% below pre-crisis levels. The pattern repeats: the company survives, the investor absorbs the loss.
3. Diversification protects against the unpredictable
Consider a frequent traveler who accumulated R$ 10,000 in credits on 123 Milhas. Not in stocks, not in funds: in credits on a single travel platform. When the company suspended operations, that "asset" went to near-zero overnight.
Diversification, the most repeated principle in investing, applies to every form of economic exposure. It is not only about spreading investments across stocks, bonds, and commodities. It is about avoiding concentration of financial commitments in a single counterparty.
The disciplined investor applies this logic consistently: does not put all capital in a single asset, does not depend on a single income source, does not concentrate all savings in a single platform.
4. Judicial integrity is part of sovereign risk
The removal of Judge Carvalho by the CNJ raises a question that extends beyond 123 Milhas: the reliability of the judicial process is a component of investment risk in any jurisdiction.
When the judge overseeing a major recovery proceeding is suspended for suspected bias, investors must consider that the legal system meant to protect creditors may itself have vulnerabilities. This does not mean the system does not work. It means that trusting blindly in legal protections carries its own risk, much like trusting blindly in financial statements.
For international investors evaluating exposure to Brazilian assets or Latin American markets broadly, judicial reliability is a factor that deserves the same scrutiny as currency risk or regulatory risk.
The Americanas parallel
Both 123 Milhas and Americanas share patterns that investors should recognize:
| Aspect | Americanas | 123 Milhas |
|---|---|---|
| Scale | R$ 40 billion accounting fraud | R$ 2.4 billion consumer fraud |
| Creditors | 16,300 | 800,000+ |
| Mechanism | Fictitious advertising contracts (VPC) | Below-cost forward ticket sales |
| Ignored signal | High leverage + margin pressure | Prices far below market |
| Governance | Power concentration in management | Family control without transparency |
| Investor outcome | Shares -50% after 3 years | Creditors face 40%+ haircut |
The scale differs. The lesson does not: in both cases, signals existed before the collapse, and in both cases, most people ignored them.
Risk management as a discipline
What connects 123 Milhas, Americanas, and every other case of financial loss is the same thing: absence of risk management. The consumer who put R$ 10,000 in tickets on a single platform had no risk management. The investor who concentrated a portfolio in AMER3 had no risk management. The bank that lent to 123 Milhas without questioning the model had no risk management.
Risk management is not a product. It is a discipline. It is the practice of asking uncomfortable questions before committing capital: what is the worst case? How much am I willing to lose? What happens if the counterparty fails?
At Royal Binary, founded by Sidnei Oliveira, risk management is the foundation of every operation. With over 340 monthly trades and a 50/50 profit-sharing model, each trade follows predefined stop-loss rules and position sizing. Returns are variable income, and past results do not guarantee future performance. But the discipline of capping losses is what separates professional operations from speculation.
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