While state and federal prosecutors in Massachusetts have secured more than $150 million of the $1 billion raised by alleged investment fraud, known as “TelexFree”, victims’ claims for restitution have yet to be processed. Authorities have said that these funds will not be available until the conclusion of the U.S. Department of Justice’s criminal case against the perpetrators of the fraud, Carlos Wanzeler and James Merrill. The court handling TelexFree’s pending bankruptcy proceedings also has approved a method for disbursing funds.
September 24, 2014 – Fidelity Bank in Fitchburg, Massachusetts, has agreed to pay $3.5 million dollars to the Massachusetts Secretary of State’s Office to settle claims that it allegedly allowed TelexFree Inc. to open bank accounts, without properly screening the company. TelexFree was an alleged investment fraud, which purported to sell discount, long-distance phone plans. The company was operated by Massachusetts residents James Merrill and Carlos Wanzeler and primarily solicited Brazilian and Dominican immigrants by selling “accounts” for about $1,400 and paying investors $100 per week to assist with marketing the company. TelexFree raised over $900 million from thousands of investors. The company was started in Brazil and had its U.S. headquarters in Marlborough.