Crime

Fraud Investigation Turns Up $20 Million In Laundered Money

| by Michael Howard

Authorities in Massachusetts seized around $20 million that was hidden under the mattress of a Brazilian man who was allegedly connected to an enormous pyramid scheme run on the internet.

Cleber Rene Rizerio Rocha, 28, was arrested and charged with conspiring to commit money laundering as part of an investigation into TelexFree, which authorities say was a fraudulent telecommunications company.

TelexFree operated out of Marlborough, Massachusetts, and reportedly sold a voice-over IP telephone service. It was founded by American James Merrill and Brazilian Carlos Wanzeler, according to Reuters.

The majority of TelexFree's revenue came from "investors" who agreed to promote the company by posting advertisements online for it. They were then paid with money that came from other investors, who oftentimes recruited friends and family members, according to The Associated Press.

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The scam originally targeted people who immigrated to Massachusetts from Brazil. However, authorities indicated that close to 1 million people were defrauded of almost $1.8 billion.

When TelexFree filed for bankruptcy in April 2014, it owed $5 billion to its investors.

Merrill was arrested the following month and subsequently pleaded guilty to wire fraud. Wanzeler escaped to Brazil and U.S. authorities were unable to extradite him.

Rocha was arrested after he arrived in the United States to help funnel money through Hong Kong and into Brazil on behalf of Wanzeler's nephew. After Rocha handed $2.2 million over to a cooperating witness, authorities followed him to Massachusetts.

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"That night, federal agents searched an apartment at the Westborough complex and seized a massive stockpile of cash hidden in a box spring," prosecutors said in a statement, according to The Boston Globe. "The cash appears to total approximately $20 million."

If convicted, Rocha faces up to 20 years in prison and a $250,000 fine. He is due in court for a detention hearing Jan. 11. His attorney could not be reached for comment.

Sources: AP via ABC News, Reuters, The Boston Globe / Photo credit: Pictures of Money/Flickr

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