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U.S. charges Brazilian with laundering massive fraud's proceeds
March 8, 2017 / 3:20 PM / 8 months ago

U.S. charges Brazilian with laundering massive fraud's proceeds

BOSTON, March 8 (Reuters) - A second Brazilian man has been charged with conspiring to launder money linked to a massive fraud out of the United States in a case that led to the discovery of $17 million in cash under a mattress in a Massachusetts apartment.

Leonardo Casula Francisco was charged on Tuesday in an indictment filed in Boston federal court that also named another Brazilian, Cleber Rene Rizerio Rocha, who was arrested in January.

Casula remains in Brazil, according to the U.S. Attorney’s Office in Boston, and as a citizen of Brazil, he is not subject to extradition to the United States.

A lawyer for Casula could not be identified. Rocha’s attorney, Raymond Sayeg, said on Wednesday that his client plans to plead not guilty.

The case stemmed from an investigation into TelexFree, a Marlborough, Massachusetts-based company that sold voice-over-internet telephone service and was founded by James Merrill, a U.S. citizen, and Carlos Wanzeler, a Brazilian who court papers said is Casula’s uncle.

Prosecutors said TelexFree was a pyramid scheme, making little to no money selling its service while taking in millions of dollars from thousands of people who paid to sign up to be “promoters” and post ads online for it.

TelexFree filed for bankruptcy in 2014, prosecutors said. In total, 965,225 victims in the United States, Brazil and various other countries lost $1.76 billion when it collapsed, prosecutors said.

Merrill, who was arrested in May 2014, is scheduled to be sentenced on March 22 after pleading guilty to conspiracy and wire fraud charges in October.

Wanzeler fled to Brazil in 2014 and could not be extradited.

According to court papers filed Tuesday, Casula in mid-2015 asked a cooperating witness to help transfer cash earned through the fraud that was hidden in the greater Boston area out of the United States.

The pair agreed that someone would be sent to the United States to deliver the money in increments to the witness, who would send it to accounts in Hong Kong where it would be transferred to Brazil, prosecutors said.

In December, Casula sent Rocha to the United States to deliver money to the witness, the indictment said.

Prosecutors said that after a Jan. 4 meeting in a parking lot where Rocha gave the witness $2.2 million in a suitcase, federal agents followed Rocha to a Westborough, Massachusetts, apartment complex.

They returned to it after arresting Rocha to find about $17 million hidden under a mattress, prosecutors said. (Reporting by Nate Raymond; Editing by Scott Malone)

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