Related: DHS Secured Telex
"TelexFree money, operatives were on the move" by Beth Healy | Globe Staff May 15, 2014
On the April day when federal agents raided TelexFree Inc.’s office in Marlborough, co-owner Carlos Wanzeler hopped into a BMW with his daughter and drove north, slipping into Canada through the tiny town of Lacolle about 11 p.m. Two days later, they caught a flight to Sao Paulo.
Wanzeler’s wife, Katia, was not so lucky. On Wednesday night, federal agents arrested her at JFK International Airport in New York as she was steps away from boarding a plane bound for Brazil, to join her husband.
The details of Carlos Wanzeler’s departure are part of a court document released Thursday, shedding new light on the moves of TelexFree’s owners in the days before they were accused of running a billion-dollar global fraud.
Prosecutors say Carlos Wanzeler and his business partner, James M. Merrill of Ashland, led an international pyramid scheme that persuaded thousands of people to invest in TelexFree and promote its Internet phone service in exchange for rich returns. Victims in Massachusetts, many of them Brazilian immigrants, may have lost up to $90 million, regulators say. Merrill is in custody on wire fraud conspiracy charges.
Katia Wanzeler was being held as a material witness Thursday, but had not been charged with a crime. The Wanzelers’ lawyer, Paul V. Kelly, said her arrest was “really unnecessary.” He said there was no legal reason to keep her from traveling to Brazil. “I’m sure we could have worked something out,” Kelly said.
But the court document described how Katia Wanzeler allegedly misled investigators about the location of her husband and played an active role in the movement of huge sums in TelexFree accounts.
When agents from Homeland Security Investigations visited the Wanzeler family’s home in Northborough on April 17, Carlos, 45, was nowhere to be found. Katia Wanzeler told the agents her husband was staying at a hotel “on the advice of counsel.’’
In reality, he had already left the country, according to the affidavit filed in federal court Thursday. That was two days after the agents had seized computers and records from TelexFree.
The court record depicts the Wanzelers and Merrill moving millions of dollars as investigators closed in on the company and before TelexFree filed for federal bankruptcy protection on April 13.
As early as Feb. 28, two bank transfers at Wells Fargo totaling $3.5 million moved funds from a TelexFree account into one bearing Katia Wanzeler’s name, according to the affidavit. After that, $1.5 million of the money moved again, this time into her Wells Fargo brokerage account.
Then, on April 11, Katia Wanzeler and Merrill allegedly traveled together to a Wells Fargo bank in Connecticut to fetch more than $27 million in cashier’s checks. Most of the checks were made payable to TelexFree entities, but one of them — for more than $2 million — was made out to Katia B. Wanzeler.
That check surfaced during the office raid, when TelexFree’s chief financial officer tried to leave with a bag stuffed with $38 million in checks.
While Carlos Wanzeler’s departure seemed brazen, his lawyer said no one told him not to leave the country.
By May 9, his business partner, Merrill, had been arrested on Route 9 in Worcester.
Four days later, “someone in Brazil” paid cash to buy Katia a ticket to Sao Paulo, prosecutors said.
At a hearing in federal court in Brooklyn Thursday, Katia Wanzeler, 49, was denied bail and kept in custody. Her lawyer in court said she had no reason to flee and was planning to return at the end of the month, according to the Associated Press.
Meanwhile, Merrill is scheduled to appear in federal court in Worcester on Friday for a detention hearing. He is being held in Rhode Island, according to people who know him. If found guilty of conspiracy to commit wire fraud, he could face 20 years in prison. So could Carlos Wanzeler — if US authorities are able to arrest him.
Well, they got bin Laden, right?
Of course, Brazil has a rain forest.
Under Brazil’s constitution, the country does not turn over its citizens accused of crimes in the United States. Wanzeler has dual citizenship and entered Sao Paulo using a Brazilian passport, authorities said.
No extradition treaty with Brazil?
Since TelexFree’s bankruptcy filing a month ago, investors around the world have been wondering if they will get their money back. And other firms with similar multilevel marketing approaches have come to light, many of them also apparently targeting Portuguese- and Spanish-speaking immigrant communities.
Secretary of State William F. Galvin’s office filed civil fraud charges Thursday against one such firm, Wings Network, which allegedly enticed more than 8,900 Massachusetts residents to invest $12.5 million with the company over the past five months. Galvin said his Securities Division has received tips on other apparently similar or related ventures as well.
“We’re starting to see connections between these various promoters, and they are often victimizing some of the same people,’’ Galvin said.
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"TelexFree co-owner who fled to Brazil may be elusive; Suspect could escape US reach" by Beth Healy | Globe Staff May 12, 2014
Federal authorities may be hard-pressed to arrest TelexFree Inc. co-owner Carlos Wanzeler, who apparently fled to Brazil, a country that is not compelled to turn over its citizens to the United States when they are accused of crimes here.
Wanzeler, 45, is believed to have left his home in Northborough for Brazil by way of Canada, according to officials briefed on his disappearance. He had nearly four weeks to go missing, from the time federal agents raided TelexFree’s Marlborough office in April until last Friday, when Department of Homeland Security investigators arrested Wanzeler’s business partner, James Merrill, on Route 9 in Worcester.
Well, no one is really missing, what with the NSA surveillance and communication collection. Unless all that stuff is for ulterior motives.
Wanzeler and Merrill, 53, were both charged Friday with conspiracy to commit wire fraud. Their company, TelexFree, sold Internet phone-service plans but grew into a global, billion-dollar pyramid scheme, prosecutors alleged, by luring thousands of people around the world to invest in the company.
Merrill is in custody, with a detention hearing scheduled for Friday in Worcester. But Wanzeler, who has dual US-Brazil citizenship, is a fugitive, according to the US Department of Justice. A warrant for Wanzeler’s arrest was issued last Friday.
Are they actively searching for Mr. Simpson?
Wanzeler’s lawyer, Paul Kelly, said Monday, “We are aware of recent legal developments and are evaluating the appropriate actions to be taken on behalf of Mr. Wanzeler.”
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"TelexFree co-owner remains in jail; Lawyer says he’s not a flight risk; judge considers bail" by Beth Healy | Globe Staff May 16, 2014
A federal judge in Worcester sent TelexFree Inc. co-owner James M. Merrill back to jail for the weekend on Friday, while he considers whether to allow the Ashland resident to be set free on bail.
Should have went with Wanzeler.
Merrill’s lawyer argued that the lifelong Massachusetts resident was not a flight risk, and said Merrill and his wife would sign over the deed to their house as security.
Bank hasn't foreclosed on it yet? (Nice house, too, from what I read earlier).
But federal prosecutors portrayed Merrill as the American face of TelexFree who enjoyed “rock star” status with the company’s participants around the world. They said he controlled hundreds of millions of dollars as president of the Marlborough company, and that if he were to flee, tens of thousands of alleged victims would stand a worse chance of recouping their losses.
Merrill is being held in Rhode Island. If found guilty of conspiracy to commit wire fraud and other potential charges, he could be facing life in prison, according to prosecutors.
TelexFree sold Internet phone service, according to prosecutors, but its real business was recruiting thousands of participants to open accounts. In what officials called a classic pyramid scheme, new investors’ money would pay off older investors.
Merrill’s business partner, Carlos Wanzeler, is considered a fugitive by federal authorities. Wanzeler fled to Brazil earlier this month after driving across the border to Canada, according to a court document.
His wife, Katia, tried to leave the country to join him in Brazil this week, but was stopped by federal agents at JFK International Airport in New York. She is in custody.
Still? Any charges yet?
Prosecutors say victims in Massachusetts, many of them Brazilian immigrants, may have lost as much as $90 million. With an estimated $1 billion lost globally, prosecutors in court Friday said this may be the largest Ponzi scheme the Department of Justice has ever pursued, in terms of number of people involved.
Not a Madoff.
Merrill’s wife, Kristin, took the stand to vouch for her husband. She said he was not a flight risk and described him as a family man who coached his children’s games, once took care of a sick friend, and went to church every Sunday.
And thus you should absolve him of all theft and crimes.
Merrill, 53, looked down at the floor during most of the proceeding, and alternately spoke animatedly to his lawyer. As he left the court room in handcuffs, his eyes welled with tears as he looked at his wife.
Awwwwwww!
Judge David H. Hennessy continued the case until Tuesday, while he considers whether to keep Merrill in custody.
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"TelexFree co-owner to stay in custody until trial" by Beth Healy | Globe Staff May 20, 2014
TelexFree Inc. co-owner James M. Merrill will remain in custody pending trial, a federal judge in Worcester ordered on Tuesday.
According to the US attorney’s office, Magistrate Judge David Hennessy made the ruling in the $1 billion fraud case.
Marlborough-based TelexFree and its principals have been charged with fraud in separate civil and criminal actions.
Merrill’s partner, Carlos Wanzeler of Northborough, has fled to his native Brazil and is considered a fugitive by US authorities. Wanzeler’s wife, Katia, tried to leave the country last week but was arrested in New York.
The judge said his decision was a close call, according to a report in the Telegram & Gazette of Worcester. The Ashland man’s lawyer had argued that he was not a flight risk, but prosecutors said Merrill had access to hundreds of millions of dollars in accounts around the world and motivation to flee because, at age 53, he could in effect be facing life in prison.
Before being led away in handcuffs, the Worcester newspaper reported, Merrill turned to his wife and other supporters, shook his head repeatedly, and said, “The truth will come out.” His wife, Kristin, broke down in tears, according to the report.
The truth is out.
She had testified on Friday that Merrill was a family man who coached his children’s soccer games and attended church.
Merrill’s lawyer, Beverly Chorbajian, said she objected to the ruling and planned to appeal....
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Related:
Worcester banker subpoenaed in TelexFree case
His brother was in on it, too?
FBI sets up website for TelexFree victims to file claims
It's already crashed like healthcare.gov!
All fun aside:
"Man living in Malden returned to Brazil to face murder charges
A Brazilian national who was living in Malden was turned over by federal Immigration and Customs Enforcement officials to authorities in Brazil, where the man is wanted for murder. Marcelo Alves-Ferreira, 39, was wanted for the May 22, 2005 murder of Jhonatan Alves Braganca in Sao Jose de Safira. Alves-Ferreira allegedly shot Braganca in the victim’s home 10 times while he slept. Alves-Ferreira was arrested on immigration violations on February 25 at his Malden home, as part of “No Where to Run,” an operation by ICE’s Homeland Security Investigations....
We don't joke about loss of life.
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