TelexFree’s Merrill Trashes Law Enforcement, Pins Hope For Pretrial Release On Stuart MacMillan, William Runge, Gerald Nehra — And Alexa Rankings

James Merrill.

James Merrill.

2ND UPDATE 9:44 P.M. EDT U.S.A. Just last week, accused promoter Faith Sloan was blasting TelexFree figures James Merrill and Carlos Wanzeler, as well as MLM attorney Gerald Nehra. In defense filings in the SEC’s civil case against her, Sloan threw all three men under the bus.

Nehra also got a mention today by Merrill, the second in eight days.

Merrill asserted that Nehra was among multiple attorneys with whom he consulted while operating TelexFree. Parts of the brief read like a damning of the MLM legal trade with faint praise.

Nehra, Merrill contended, “holds himself out as the expert in the field of multi-level marketing.”

And, Merrill argued through defense attorney Robert M. Goldstein, Nehra “offered his support for the multi-level marketing plan being used by TelexFree, and told promoters he was ‘honored to be the MLM specialist on retainer attorney for TelexFree.'”

Class-action lawyers have contended Nehra engaged in racketeering with Merrill and others while counseling TelexFree and divined a construction by which TelexFree was not engaging in fraud and the sale of unregistered securities.

Merrill nevertheless contends that he has “substantial ‘advice of counsel’ and state of mind defenses to any prosecution—a point the government to date has not contested in the slightest respect.”

Regulators have called TelexFree a billion-dollar Ponzi- and pyramid fraud that used a VOIP product as a front to mask an investment scheme that promised returns of more than 200 percent a year — with sales commissions on top of the investment plan.

In the early stages, Merrill’s defense has concentrated on getting him freed on bail. He’s been detained since his May 9 arrest on a criminal charge of wire-fraud conspiracy. Merrill has signaled that a “reliance of counsel” defense, specifically the counsel of Nehra, may be part of his strategy as the case-in-chief winds through federal court in Massachusetts.

Another part of Merrill’s strategy appears to be to highlight Merrill’s family bonds to Massachusetts while at once trashing legwork by law enforcement. Merrill today contended that an affidavit prepared by a federal agent after an undercover probe that began at least by October 2013 was “grossly misleading” and “remarkably misleading.”

At the same time, Merrill contends that favorable testimony delivered in the TelexFree bankruptcy case by interim TelexFree CEO Stuart MacMillan should be considered by the judge in the criminal case to free Merrill on bail.

Merrill and co-defendant Carlos Wanzeler hired MacMillan on April 13, according to court filings. Like Merrill, Wanzeler has been charged criminally with wire-fraud conspiracy. Federal prosecutors have described Wanzeler as an international fugitive.

Testimony by William Runge, a turnaround specialist working with MacMillan, also is favorable to Merrill’s position he should be released on bail, according to the defense filing today.

Prosecutors have contended Merrill should remain  jailed, saying he may have access to cash and admirers to help him make an escape bid and asserting that TelexFree had a “cult-like quality” and thousands of promoters who  “remain fanatically loyal to the company.”

Merrill also claimed today that TelexFree’s Alexa ranking was “astounding” in a good way and demonstrated that the government overreached in efforts to keep Merrill in jail.

MLMers often suggest that a high ranking in Alexa is “proof” of the legitimacy of a “program.”

How soon a judge will decide the bail issue was unclear tonight. Merrill lost his initial bid last month to be freed on bail.

NOTE: Our thanks to the ASD Updates Blog.

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4 Responses to “TelexFree’s Merrill Trashes Law Enforcement, Pins Hope For Pretrial Release On Stuart MacMillan, William Runge, Gerald Nehra — And Alexa Rankings”

  1. from what I understand. continues prisoner.

    * 15th Ernst & Young has to deliver audit Telexfree Brazil. expect a clarification on what type of fraud is Telexfree. is ponzi? is not it? is that anyway?

  2. It is fraud. Nothing else is important, esp. “what type”. That is for the lawyers.

  3. Nehra, Merrill contended, “holds himself out as the expert in the field of multi-level marketing.”

    clem will not be happy to read this.

  4. Quick note to a would-be poster who tried to post at 8:50 a.m. today and may be in Canada:

    I am not going to permit you to post under the username you selected. Please pick another username.