DEVELOPING STORY: U.S. Attorney Carmen Ortiz ‘Has Been Recused’ From Prosecution Of TelexFree Figures James Merrill and Carlos Wanzeler
2ND UPDATE 6:27 P.M. EDT U.S.A. A government filing dated July 1 — a Friday before the long Independence Day weekend — says U.S. Attorney Carmen Ortiz of the District of Massachusetts “has been recused” from the prosecutions of TelexFree figures James Merrill and Carlos Wanzeler.
The document does not say why Ortiz no longer will oversee the cases against the alleged pyramid- and Ponzi-schemers. The recusal comes more than two years after Merrill and Wanzeler were charged criminally by prosecutors in Ortiz’s office and nearly 24 months after they were indicted.
Ortiz, in May 2014, described the alleged fraud as “breathtaking.”
At the time of this story, no media announcement about the recusal appears on the U.S. Attorney’s website.
On Saturday (today), Ortiz’s office did not respond immediately to a request for comment.
U.S. District Judge Timothy S. Hillman is presiding over the cases.
Here is the text of the “NOTICE OF RECUSAL BY THE UNITED STATES ATTORNEY” dated yesterday (italics added):
The United States respectfully notifies the Court that United States Attorney Carmen M. Ortiz has been recused from this matter. Pursuant to 28 U.S.C. § 515 and related delegations, an Associate Deputy Attorney General has directed and authorized First Assistant United States Attorney John T. McNeil to have the status, and perform all of the authorized functions, of a United States Attorney with respect to this case.
Ortiz announced the appointment of McNeil as her first assistant on April 28, 2014. TelexFree declared bankruptcy just 15 days earlier, on April 13. The SEC moved against TelexFree on April 17, 2014.
Section 3-2.170 of the U.S. Attorneys’ Manual says recusals are required “only where a conflict of interest exists or there is an appearance of a conflict of interest or loss of impartiality.”
From the manual (italics added):
A United States Attorney who becomes aware of circumstances that might necessitate a recusal of himself/herself or of the entire office, should promptly notify [the General Counsel’s Office of the Executive Office For United States Attorneys] at . . . to discuss whether a recusal is required. If recusal is appropriate, the USAO will submit a written recusal request memorandum to GCO. GCO will then coordinate the recusal action, obtain necessary approvals for the recusal, and assist the office in arranging for a transfer of responsibility to another office, including any designations of attorneys as a Special Attorney or Special Assistant to the Attorney General . . .
Whatever TelexFree-related conflict exists, it appears only to affect Ortiz, given that her first assistant has been put in charge and the entire U.S. Attorney’s Office in Massachusetts has not been excluded from the prosecution.
NOTE: Our thanks to the ASD Updates Blog.