TelexFree Criminal Case Interim Status Report (Dec 2014)
As per the local rules of the District Court of Massachusetts, the James Merrill’s attorney and the US Attorney’s Office (DOJ) have filed an interim status report.
The report, filed ahead of today’s hearing (December 18th), provides some updates and insight into the status of the Wanzeler/Merrill criminal case.
On the discovery side of things,
The government has provided substantial discovery to date, including additional discovery since the last status date, but discovery is not complete.
Since the last status date, the government has produced records from two consultants employed by TelexFree during the alleged conspiracy; forms and affidavits for two postindictment search warrants for email and YouTube content; returns received as to two of the five email accounts identified in the email search warrant; and Brady disclosures based on various witness statements.
For those unfamiliar with the term, a “Brady disclosure” is
exculpatory or impeaching information and evidence that is material to the guilt or innocence or to the punishment of a defendant.
With these disclosures coming from the government, I’m making an educated guess that the disclosures in question are impeaching in nature.
Unfortunately who made the statements and what they witnessed (fraud in general?) has yet to be disclosed.
Most of the discovery appears to be on track for production, but there was at least one significant delay:
The government was also on track to produce, by December 10, 2014, an electronic version of the 40 boxes of material seized from TelexFree’s headquarters in April 2014, but the outside vendor processing the material made several errors that are now being fixed.
The government should be able to make that production within a few weeks (the holidays will intervene).
Other items of discovery yet to be produced by the government include:
- the materials seized from TelexFree’s offices in Marlborough, Massachusetts, in April 2014
- about 81 gigabytes of data (about 355,000 pages) received in October 2014 from the Trustee supervising TelexFree’s affairs in bankruptcy
- materials from law enforcement authorities in Brazil, who have been aggressively investigating TelexFree’s operations in that country
This production will be large; for example, Brazilian authorities have executed about nine search warrants to date.
By the end of January 2015 the government should have a better idea of what this production will entail.
- the results of three remaining email search warrants served on or about September 25, 2014
- the results of a search warrant served on Google, Inc., on or about October 16, 2014, for a substantial amount of video content held by its subsidiary, YouTube
The government has been in regular contact with Google (as recently as December 16, 2014). Google reports that compliance will take several more weeks.
- various recordings made by undercover HSI agents at TelexFree conferences and in conversations with a TelexFree promoter
Like the Brady disclosures, who the promoter is HSI have recordings of is yet to be disclosed.
Merrill’s lawyer and the US Attorney’s Office have suggested another interim status conference be held in 60 days, which puts us at the end of February.
One would assume the outstanding discovery matters would by then have been settled. Then we get into the interesting stuff.
Looking forward, given both the US Attorney and Merrill’s lawyer’s signature is on the interim report, I imagine tomorrow their scheduling suggestion will be entered in via order.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the December 2014 Interim Status Report.