2 indicted in alleged pyramid scheme
Jul. 24, 2014
BOSTON (AP) — The owners of an Internet phone service that authorities allege was a billion-dollar pyramid scheme that cheated thousands of investors have been indicted by a federal grand jury on wire fraud and conspiracy to commit wire fraud charges.
The indictment filed Wednesday alleges that TelexFree Inc. owners James Merrill of Ashland and Carlos Wanzeler of Northborough knowingly devised "a scheme and artifice to defraud."
Federal authorities allege that TelexFree made most of its revenue from people buying into the company with a promise of getting paid for posting online ads for it.
TelexFree filed for bankruptcy in April. Securities regulators have frozen its assets.
Lawyers for both men tell The Boston Globe (http://bit.ly/1AbcR4l ) that their clients have done nothing wrong. Merrill is free on $900,000 bail. Wanzeler has fled to Brazil.
Information from: The Boston Globe, http://www.bostonglobe.com