James Merrill sentenced to six years prison for TelexFree fraud
The DOJ wanted ten years, Merrill’s lawyers argued for just over a year… Judge Hillman mulled both side’s arguments and decided on six years.
The criminal case docket has yet to update but the Boston Globe are reporting James Merrill, co-owner of the $3 billion dollar TelexFree Ponzi scheme, has been sentenced to six years in prison.
Merrill, whose wife, children, and friends were in the court room, apologized to his victims before he was sentenced.
“It’s awful and I don’t have words I can give these people for what they’ve suffered,” he said. “I’m sorry for this whole disaster.”
Merrill has been ordered to surrender to authorities by May 15th.
His sentencing brings us closer to closing the TelexFree Ponzi saga, however Carlos Wanzeler, Merrill’s partner in crime, remains a fugitive in his native Brazil.
Brazilian authorities recently indicted Wanzeler and he remains wanted by US authorities to stand trial, but if that ever actually eventuates remains to be seen.
US authorities recently indicted Wanzeler’s nephew on related money laundering charges.
As for Merrill, his six-year sentence is the ultimate price he’ll pay for making millions off the back of Ponzi fraud.
“All he had to do was get up and leave,” prosecutor Andrew Lelling said. “There’s a difference between what you say and what you actually do.”
In addition to prison time, Merrill has been stripped of his illegal earnings, reputation and evidently hard-worked for standing in his local community.
Although it’s difficult to predict, I’d say Merrill’s six years suggests if he ever does face trial in the US, Wanzeler is probably looking at a minimum eight year sentence (probably closer to ten).
Update 24th June 2017 – A June 22nd Status Report filed by the DOJ in the SEC’s civil case against TelexFree reveals;
On May 31, 2017, Mr. Merrill reported to the Bureau of Prisons.
Pending news about the status of Wanzeler in Brazil, I assume the SEC’s civil case will resume some point soon.
whoa oz! 6 years! you are one hell of a guesser boss 🙂
i think this is a fair sentence. kudos to the criminal justice system of the US!!
Mastermind the robbery of billions of dollars from thousands of people and risk a whopping 6 years in jail.
That’ll act as a great deterrent.
Just demonstrates the current twisted broken US criminal court system.
Oz, put the link to the final sentence paper. Where can I find the sentence transcript, is it easy to get?
The case docket has a paragraph order, which adds an additional 3 years supervisory release to the sentence.
Other than that you’d have to request a transcript from the court ($$$) if you wanted one.
6 years sentenced encourages others to do Ponzi. Make truck loads of money, hide it then use it after getting out of jail. Crazy system.
Not quite.
IOW, he’ll never be clear of the debt.
Lol, did you have the case docket? This is free?
Pacer. Need an account.
How this work in justice? If he has this debt that he will NEVER pay, what this mean? He can never borrow money? He can never have something expansive (even if he can buy with legal money)?
It means he will have to enter an agreement with the Department of Justice whereby he must inform them of any income and assets and commit to paying a percentage of that income toward his debt.
after wanzeler fled the US for brazil, the bankruptcy court determined that telexfree was a ponzi scheme and the trustee began to send out restitution cheques to the victims from recovered funds.
wanzeler must have surely known of this, yet he continued to hide 20 million in cash in a mattress in the US, and was laundering this money via hongkong to himself in brazil.
^^ this could add another charge of money laundering against him. he could also be charged with the concealment of stolen property or obstruction of justice or something like that, which would be an additional felony charge.
so, wanzeler’s continued criminal behavior after fleeing justice, could add a good number of years to his basic sentence for devising and running the telexfree ponzi.
but first, we’ll have to wait for brazil to deliver their justice to him and then be willing to extradite him for a second punishment under US law.
Quite a different to Merrill’s six years…
Post from murobbs: murobbs.muropaketti.com/threads/onecoin-uusi-pyramidihuijaus-krp-rikosta-voidaan-arvioida-luotettavasti-vasta-myoehemmin.1197240/page-619#post-1718248041
should organize ponzi defraud defrauded of 25 million people, then get 2-3 years in prison, go out and live happily for the rest of life.
I would have given him the electric chair.
The major point her is that it was determined he didnt “mastermind” anything. The masterminds are still at large … he was nothing more than a patsy… and 6 years of your life when youre in your 50s is a big deal.
Furthermore the 140 million dollar restitution is almost ridiculous considering Merrill only was paid 3.5 million… while wanzeler and costa horded and continued to live on (mattress Money) hundreds of millions. Ignorance is clearly not bliss
“Misprision” is still a crime. (No, I didn’t make up the word)
Chalk it up to knowing the wrong friends. Didn’t I read somewhere that Merill came of money and Wanzeler family used to clean his mansion or something like that?
K. Chang… you may have read that but it’s not true. Merrill had a janitorial business that cleaned offices and hired Wanzeler as a young twenty year old immigrant who couldn’t speak English.
With your other user name James Charles you have spent the last two years on Behind MLM furiously defending Merrill by accusing Oz and other regular contributors of lying, alleging that the media had deliberately printed misleading stories regarding your hero, blaming anybody and everybody except Merrill for the downfall of TelexFree and even at one point accusing the biggest losers in the scam of being instrumental in its downfall. You really have no shame in my opinion.
Merrill is lucky that he’ll be spending his time in a US jail. If he’d been sentenced in Thailand like the Ufun scammers he’d have likely ended up in the Bangkok Hilton for the rest of his life.
In as much as I haven’t posted anything on here in almost 3 years , I would say you may be exaggerating a touch.
Having said that a few years later I stand vindicated that the the individuals listed as the largest losers in the scheme did indeed turn out (at least according to the courts ) to be the perpetrators of the scheme itself… all or most of whom have been or are on their way to being indicted. This includes Wanzelers own nephew.
There were indeed some “extensions of the truth ” told by Oz and a few others… and I only meant to try to set the record straight as some of the “alternate facts ” posted are far enough away to be laughable… including Merrills mansion mentioned above.
Merrill is not my hero. He was a sad patsy who was in way overhhis head and was played by Costa and Wanzeler and I agree that ignorance is not an excuse.
Unless however you know the details, standing on the sidelines tossing peanuts, exaggerations and your own version of the story doesn’t help future victims be aware.
There are many victims here , in my opinion Merrill may be one of them. People need to be wary when someone wants to join their company and take on an executive roles, directing you to do this and say that, particularly as the evidence showed, when you have absolutely no control over outcomes.
I have plenty of shame. And you’re lucky you don’t live in Thailand where you can receive the same sentence you outlined for simply bearing false witness or casting aspersions on the character of someone you don’t know.
It’s an odd country where having sex with a 12 year old girl seems more acceptable than a few mistold stories in court. Let’s just say we’d all rather be in the US than Thailand. Except maybe for Costa and Wanzeler.
Err, it was a three BILLION dollar ponzi scheme and Merrill was on the inside all along.
So, enough with the rationalizing and justifying, OK ???
then he is the stupidest con man on the planet because the tally of his take was 3.5 million over 3 years.
Sounds accurate to me. Cased closed now let’s nab Wanzeler.
Agreed! And The Godfather Costa
Oh, that’s different then.
“ONLY” three and a half million dollars of other peoples’ money ????
Hardly worth getting out of bed for.
Forget about a prison sentence, give him a good talking to and send him on his way.
Yeah, right
Thanks for the correction.
I wanted to make a quick correction to some of the information above regarding the ‘largest losers’. When Alvarez prepared the bankruptcy petition/list of largest creditors, they didn’t calculate who lost the most money.
Rather, they listed the people with the largest accumulated credit balances (i.e. Ponzi points) in the Back Office system. They may have been the largest losers in the sense of having the most fake funds left in the system when the scheme collapsed, but it’s not accurate to call them losers in any real sense.
That’s why many of those people were explicitly named by the Trustee in his various avoidance actions; rather than being losers, those people were among the largest TelexFree winners. They just didn’t extract the maximum they could have.
As to the six-year sentence, the government’s sentencing memo is pretty straightforward. While Merrill played a large role in the scheme, he expressed concern about it early on and made belated steps to make changes.
Merrill also proffered useful information and I’d assume helped lead the authorities to additional assets. They do not view Merrill ans the fraud’s “prime mover”.
It’s clear that the government places most of the blame on Wanzeler/Costa. Relatedly, the government even states they’d likely seek a 20-year sentence if Wanzeler ever comes to trial in the US.
Regardless of the horrors Merrill inflicted on so many people via this scheme, he does appear to have been viewed by his friends and family as an exemplary man and the gov’t doesn’t seem to think he’s likely to reoffend.
The judge mostly split the difference. While six years for what the gov’t estimates to be a $3.5 billion fraud with nearly 2 million victims definitely doesn’t seem to fit, the mitigating factors apparently were weighed heavily by the Court. And to a white collar worker, I’m sure those six years will feel like sixty.
Just my perspective. Love the blog and the great discussion!
He was an ‘exemplary man’ who only stole $3.5 million according to Charles James/James Charles. My heart bleeds for him.
let us never forget, his brother, was president of a bank. these people know how to move money around, and had all the access to do so when it was all up and running. so i wouldn’t be so sure about the 3.5.
Article updated with news of Merrill reporting for prison on May 31st.
What ever happened to Costa, the Brazilian dude who started it all?
There was an indictment in Brazil but I haven’t heard anything since.
Like the rest of the Brazilian TelexFree scammers, Costa is laying low.
He’s old and likely scammed enough to retire off of.
You will be happy to know that James Merrill has been released and is now back home.
Bit earlier than six years but hopefully Merrill learnt something from the experience.
Dirty stinking twats !!! I lost several thousands! I hope they pay with their lives !!!