Financial crime nets six years for TelexFree founder
Do you ever feel awkward trying to break a hundred-dollar bill? Try $20 million in cash. Hidden in a mattress in Massachusetts—with no good plan to launder it.
That story of $20 million in a mattress broke in late January in what turned out to be a money laundering effort tied to the TelexFree pyramid scheme. Federal agents busted that scam in 2014, eventually revealing that approximately $3 billion had been lost by investors who signed on to receive bonuses for advertising and recruiting others. The core business—voice-over-internet calling—did little actual business while the pyramid scheme flourished.
One of the founders, James Merrill of Massachusetts, was sentenced this week to six years in prison. Merrill had surrendered and confessed, but another founder, Carlos Wanzeler, had fled to Brazil, resulting in multiple attempts by him and his associated to access and launder the millions in cash in the mattress in Massachusetts.
Wanzeler cannot be extradited from Brazil. However, two Brazilians have been charged in the U.S. with conspiring to money launder the stranded cash from the defunct TelexFree scheme.
The New York Times reports that TelexFree caused “nearly 1.89 million people from over 100 countries, including the United States and Brazil, to lose nearly $3.05 billion, prosecutors said.”
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