Despite efforts from the US, Brazil is doing its best to ensure TelexFree co-founder Carlos Wanzeler escapes punishment.

Although he worked with accomplices, Carlos Costa in Brazil and James Merrill in the US, Wanzeler is the mastermind behind TelexFree.

TelexFree was a $3 billion Ponzi scheme shut down by US authorities back in 2014.

Wanzeler, who held dual Brazilian and US citizenship at the time, fled to Brazil before he could be apprehended.

Wanzeler’s US partner-in-crime, James Merrill (right with Wanzeler (L)), was arrested in 2014 and has already served a six-year prison sentence.

Wanzeler fleeing to Brazil complicated his criminal proceedings, owing to Brazil’s policy of not extraditing its own citizens.

Pending the outcome of parallel criminal proceedings in Brazil, it seemed Wanzeler would forever remain a fugitive wanted by the US.

Unexpectedly, things changed following a precedent set by the Brazilian Federal Supreme Court in 2017.

Another criminal with dual US and Brazilian citizenship had been stripped of her Brazilian citizenship on the basis she gave up her Brazilian nationality when she was naturalized as a US citizen.

That criminal who US authorities filed an extradition application for in 2013, had her Brazilian citizenship revoked and was subsequently extradited.

In February 2018, Carlos Wanzeler became the second dual-national to be stripped of his Brazilian citizenship under the new law.

Two years of appeals later, Wanzeler was finally arrested on a US warrant in February 2020. By September 2020, Brazilian authorities had confirmed Wanzeler was set to be extradited to the US.

Throughout Wanzeler’s extradition proceedings, the Brazilian criminal cases against him and Carlos Costa continued in the background.

One of the Brazilian TelexFree criminal cases finally resulted in the arrest of Wanzeler and Costa in December 2019.

Unfortunately that didn’t stick and within a few days Wanzeler and Costa were released. The February 2020 execution of the US arrest warrant was actually Wanzeler’s re-arrest.

Naturally Wanzeler appealed his US warrant arrest. The appeal was granted in March 2020 on the basis Wanzeler had reapplied for Brazilian citizenship.

Wanzeler remained in prison but the appeal decision once again put the brakes on his US extradition.

In May 2020, Wanzeler and Costa were convicted in the same case that led to their December 2019 arrest.

On charges related to running an “unregistered fraudulent banking institution”, Wanzeler and Costa were each sentenced to 12 years and 6 months in prison.

Wanzeler and Costa both appealed their convictions. Meanwhile, under appeal or not, Wanzeler’s Brazilian sentence was another roadblock to his US extradition.

Following a petition to then Brazilian President Jair Bolsonaro, Wanzeler was released from prison (where he was still being held on the US extradition warrant) in August 2021.

Bolsonaro ordered Wanzeler’s release on the basis his “extradition can only be carried out after the conclusion of criminal proceedings”.

Bolsonaro was found to have abused his power in office and misused public media by Brazil’s highest electoral court in 2023. He is barred from running for office in Brazil until 2030.

Bolsonaro would go on to be indicted by Brazilian authorities on unrelated fraud charges earlier this year.

Meanwhile, four years later, Carlos Costa hasn’t served a day of his sentence. Costa’s and Wanzeler’s appeals against their TelexFree conviction remain pending.

And, as of April 2023, Carlos Wanzeler is no longer under threat of extradition to the US.

Towards the end of 2022, Brazilian authorities granted Wanzeler provisional Brazilian citizenship. That was enough for Wanzeler to initiate renunciation of his US citizenship.

Why Brazilian immigration officials granted Wanzeler, a fraudster convicted of running a $3 billion Ponzi scheme and defendant in 11,000 civil lawsuits, 15 criminal lawsuits and a single public civil action, provisional citizenship is unclear.

Apparently the bar to clear for obtaining Brazilian citizenship is non-existent.

The current status of Wanzeler’s US citizenship is unknown. I suspect the play there is to get Wanzeler’s US citizenship renounced, forcing Brazilian immigration officials to either grant Wanzeler citizenship or make him stateless (cue years of humanitarian appeals?).

As of August 2023, the outcome of Wanzeler’s and Costa’s Brazilian conviction appeals remain pending.

While Wanzeler’s fugitive status in the US won’t ever expire, I suspect he’ll never face any real consequences in Brazil.

This month marks ten years and two months since TelexFree was shut down, with no end in sight to Brazilian proceedings. Be it a few days, another year or a few decades, there is no timeline for Wanzeler’s and Costa’s never-ending appeals.

While there has been some justice in the US, Brazilian TelexFree victims continue to be betrayed and let down by their justice and immigration systems.