9TH UPDATE 2:08 P.M. EDT U.S.A. U.S. District Judge Timothy S. Hillman’s calendar shows a plea hearing for TelexFree operator James Merrill at 2:30 p.m. Monday at the federal courthouse in Worcester, Mass.
The Boston Globe, citing the “U.S. Attorney,” is reporting Merrill will plead guilty “to fraud and other charges.” The Telegram & Gazette also is reporting Merrill will plead guilty.
The office of U.S. Attorney Carmen Ortiz has confirmed the guilty plea to the PP Blog.
“President of TelexFree, James Merrill, has agreed to plead guilty on the eve of trial for his role in the billion dollar pyramid scheme,” a spokeswoman for Ortiz confirmed.
Details of the plea were not immediately clear. Merrill, who earlier pleaded not guilty to 17 charges, had been scheduled to go on trial Nov. 8.
A notation today on the court docket read, “Counsel is to contact U.S. Probation and Pretrial Services as soon as possible . . . to determine scheduling of the presentence interview.”
Stephen B. Darr, the court-appointed trustee in the TelexFree bankruptcy case, has described TelexFree as a combined Ponzi- and pyramid scheme that involved more than $3 billion in illicit transactions.
Initially charged in 2014 and charged last month with additional counts in a superseding indictment, Merrill had fought the charges all along, making the 11th-hour guilty plea something of a surprise.
One of Merrill’s business partners — Carlos Wanzeler — allegedly fled the United States for Brazil in 2014. Wanzeler has been indicted in the United States. U.S. prosecutors have described him as a fugitive.
TelexFree, an MLM firm purportedly in the VOIP business, was a cascading, cross-border fraud, according to the U.S. Department of Homeland Security. The agency’s Homeland Security Investigations unit actually joined the “program” as part of an undercover investigation that began in 2013.
Paul Burks, the operator of the Zeek Rewards MLM scheme, was convicted on all criminal counts against him by a federal jury in July. Burks, 69, potentially faces decades in prison.
Merrill was 53 when indicted in 2014. Like Burks, he also potentially faces a long prison sentence.
NOTE: Thanks to the ASD Updates Blog.