telexfree-logoWhen multiple financial institutions began shutting down TelexFree’s banking accounts, Jim Merrill turned to his brother, John Merrill.

As President of Fidelity Cooperative Bank, John Merrill was certainly in a position to help his brother. And help him he did, with TelexFree granted permission to open three bank accounts with Fidelity in 2013.

After regulators shut down TelexFree for being a $1.8 billion dollar Ponzi scheme, Fidelity Cooperative came under scrutiny for its role in enabling Ponzi fraud.

To their credit Fidelity Cooperative did eventually ask TelexFree to close their accounts, but after five months the damage had been done.

TelexFree went on to secure bank accounts with other financial institutions but for its part in the Ponzi scheme, Fidelity Cooperative reached a settlement with the court-appointed Receiver for $3.5 million dollars.

The settlement was announced almost a year ago, but it was only last month that $2.9 million of it was returned to TelexFree victims.

Now in a move seemingly seeking to completely distance itself from TelexFree’s financial fraud, John Merrill will soon find himself unemployed.

The official reason for Merrill’s departure from Fidelity is a “career change”:

Mr. Merrill told the bank’s board a few months ago that he plans on making a career change, but has indicated he will stay on until June 2016.

In what capacity Merrill will stay on at Fidelity Cooperative is unclear (a “stay at home and don’t talk to anyone” role perhaps?), but what we do know is after decades in the financial sector, a true career change at Merrill’s age is unlikely.

As per Merrill’s Fidelity Cooperative corporate bio:

A Worcester native, John Merrill has had a distinguished 33-year career as a leading banker in Central Massachusetts.

He was appointed as Fidelity Bank’s President and Chief Lending Officer in September 2010. As such, he oversees all customer facing business lines including Commercial Banking, Retail Banking, Residential and Consumer Lending.

In addition to above, he was appointed Chief Operating Officer in 2013.

Had his brother not dragged him into his Ponzi mess, a few more years and John Merrill might have very well been looking at comfortable retirement.

Then again, maybe after the TelexFree experience John just figured he’d had enough. Who knows.

As for Fidelity Bank, they currently have about $615 million in assets and recently announced a merger with Barre Savings Bank.

Perhaps in an effort to ensure the bank never gets involved in a Ponzi scheme again, Merrill’s former role will be split into two positions going forward:

Fidelity Bank has named Christopher W. McCarthy of Holden to be its new president and chief operating officer as of Oct. 5.

Edward Manzi, chairman and chief executive officer of Fidelity Bank, indicated that because of the bank’s growth and increasing complexity, Mr. Merrill’s role will be replaced by not only Mr. McCarthy, but also by a second individual, yet to be hired. That person will serve as the bank’s senior lender.

Had someone been looking over Merrill’s shoulder in 2013, perhaps none of this might have happened. At least as far as Fidelity Bank’s involvement in TelexFree went.

Personally I think the lesson in this is, even if it’s a family member behind it, Ponzi fraud is still fraud – no exceptions.