Merrill’s U.S. Plea Requires Him To Cooperate With Brazilian Federal Police
James Merrill.
If Brazil’s Federal Police wish to ask him about TelexFree’s involvement in wire fraud and an underlying conspiracy, James Merrill is required to provide a “complete and truthful proffer,” according to the terms of his plea agreement with U.S. prosecutors in Massachusetts.
Merrill, 55, of Ashland, Mass., also is required to cooperate with U.S. agencies that have questions about the fraud, according to the agreement. The agreement ultimately may pit Merrill against Carlos Wanzeler, a TelexFree co-founder charged with wire fraud and conspiracy in the United States.
U.S. prosecutors say Wanzeler fled to Brazil after TelexFree’s massive Ponzi- and pyramid scheme was exposed in April 2014. Brazil’s Federal Police continue to investigate TelexFree and an affiliate known as Ympactus in that country. The Brazilian probe also involves TelexFree figure Carlos Costa.
U.S. prosecutors said yesterday that Brazilian Federal Police had provided “valuable assistance” in the U.S. probe. The office of U.S. Attorney Carmen Ortiz also lauded U.S. agencies and the Massachusetts Securities Division, the state-level regulator.
Under the plea agreement, Merrill would receive prison time of no more than 10 years. Eight counts of money-laundering would be dismissed.
“Merrill also agreed to forfeit approximately $140 million, numerous real estate properties, luxury vehicles and boats,” U.S. prosecutors said.
In the agreement, Merrill said the deal was in his best interests and that “I am guilty of the offenses to which I am pleading guilty.”
The agreement noted Merrill had rejected plea offers made earlier. Merrill, who potentially could have faced decades in prison, was defended by Robert M. Goldstein.
Merrill pleaded guilty yesterday to eight counts of wire fraud and one count of conspiracy. U.S. District Judge Timothy S. Hillman scheduled sentencing for Feb. 2.
Note: Thanks to the ASD Updates Blog.
News of the guilty plea spreading around Brazil now.
PP Blog’s references to the TelexFree/Botafogo soccer sponsorship flap can be found here:
https://patrickpretty.com/2014/01/09/with-carlos-costa-gesticulating-wildly-telexfree-an-alleged-pyramid-scheme-says-its-now-a-soccer-benefactor/
https://patrickpretty.com/2014/01/15/sportv-video-shows-that-telexfree-an-alleged-pyramid-scheme-is-using-a-shared-office-facility-in-massachusetts-with-at-least-25-other-firms/
https://patrickpretty.com/2014/02/26/scrutiny-of-telexfree-intensifies-2-european-police-agencies-issue-warnings-and-say-madeiran-community-at-risk/
https://patrickpretty.com/2014/04/03/editorial-uproar-in-telexfrees-billion-dollar-broom-closet/
https://patrickpretty.com/2015/01/19/telexfreeifreex-figure-sann-rodrigues-appears-in-car-with-emerson-fittipaldi-is-brazilian-racing-legend-being-duped-by-mlm-huckster/
https://patrickpretty.com/2014/01/11/report-flap-over-telexfree-soccer-club-deal-deepens-botafogos-main-sponsor-reportedly-does-not-want-its-name-associated-with-alleged-pyramid-scheme/
https://patrickpretty.com/2014/05/12/bulletin-botafogo-soccer-club-dumps-telexfree/
Patrick
Full statement by SEC on Merrill’s guilty plea in the criminal case:
____________________________________________________________________
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23678 / October 25, 2016
Securities and Exchange Commission v. TelexFree, Inc. et al., No. 1:14-cv-11858-DJC (D. Mass. filed Apr. 15, 2014)
United States v. Carlos Nataniel Wanzeler and James Matthew Merrill, Criminal Action No. 14-cr-40028-TSH (D. Mass. filed May 9, 2014)
Telexfree President Pleads Guilty to Operating Pyramid Scheme in Related Criminal Action
On October 24, 2016, James M. Merrill, of Ashland, Massachusetts, the former president of TelexFree, Inc. and TelexFree, LLC, pled guilty to criminal charges related to his operating a pyramid scheme through TelexFree. On May 9, 2014, Merrill and another defendant, Carlos N. Wanzeler, who is a fugitive located in Brazil, were charged in a federal criminal complaint, charging them with conspiracy to commit wire fraud. The criminal charges against Merrill arose out of the same fraudulent conduct alleged by the SEC in a civil securities fraud action filed in April 2014.
The SEC’s complaint alleged that TelexFree, Merrill, Wanzeler, and other defendants claimed to run a multilevel marketing company that sold telephone service based on “voice over Internet” (VoIP) technology but actually were operating an elaborate pyramid scheme. In addition to charging Merrill and the company, the SEC charged several other TelexFree officers and promoters, and named several entities related to TelexFree as relief defendants based on their receipt of ill-gotten investor funds.
The SEC’s action, which remains pending against all parties, seeks injunctions against each of the defendants from further violations of the charged provisions of the federal securities laws, disgorgement of ill-gotten gains, and civil monetary penalties, among other things.
For further information, see Litigation Release Nos. 22974 (Apr. 17, 2014) (SEC Halts Pyramid Scheme Targeting Dominican and Brazilian Immigrants); 22992 (May 13, 2014) (Criminal Charges Filed Against Two Principals of Massachusetts-Based Telexfree); 23450 (Jan. 20, 2016) (Florida Resident Ordered to Jail Based On Violating Court Orders Obtained by the SEC).
http://www.sec.gov/litigation/litreleases/2016/lr23678.htm
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Source: https://www.sec.gov/litigation/litreleases/2016/lr23678.htm
Patrick