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Thursday, May 15, 2014

Wife of TelexFree co-owner arrested at JFK Airport

Authorities raided the headquarters of Marlborough-based TelexFree last month.
AP/METROWEST DAILY NEWS, ALLAN JUNG/FILE
Authorities raided the headquarters of Marlborough-based TelexFree last month.

The wife of TelexFree Inc. co-owner Carlos Wanzeler was arrested at JFK International Airport on Wednesday night as she tried to board a flight to leave the country and join her husband in Brazil, according to the US attorney’s office.
Katia B. Wanzeler was arrested on a material witness warrant, said Christina Sterling, the US Attorney’s spokeswoman. She was scheduled to appear in federal court in Brooklyn, N.Y., Thursday afternoon. Her husband has already fled to Brazil and is considered a fugitive by federal authorities.
An affidavit filed in court Thursday detailed a multi-day odyssey in which Carlos Wanzeler managed to leave the United States. On April 15, the day his Marlborough-based company’s office was raided by federal agents investigating an alleged $1 billion global fraud, Wanzeler and his daughter Lyvia drove to Canada in the family’s BMW. They crossed the border at 11 p.m. at Lacolle, Quebec.

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Wanzeler’s business partner, James Merrill, was arrested last week and is in custody, pending a detention hearing in Worcester on Friday.Two days later, the father and daughter boarded an Air Canada flight from Toronto to Sao Paulo, Brazil. Wanzeler entered the country of his birth using a Brazilian passport. That same day, as federal agents executed a warrant to search Wanzeler’s Northborough home, Katia told them her husband was staying at a hotel on the advice his lawyer.
Katia Wanzeler’s name surfaced in the TelexFree fraud investigation after a check made out to her was seized by federal agents at the company’s local office. According to the affidavit, “significant sums of money were moved” from TelexFree bank accounts into a Wells Fargo account in the name of Katia Wanzeler.
On Feb. 28, two transfers to her account totaled $3.5 million, according to the affidavit. Subsequently, $1.5 million of that was moved into a Wells Fargo brokerage account bearing her name.

The Wanzelers’ daughter actually returned to the U.S. recently, before leaving again. On April 26, Lyvia Wanzeler flew to Boston on a round-trip ticket, using her father’s frequent flyer miles. She was scheduled to return to Brazil on June 4, but instead left on May 1 for Italy.In April, just days before TelexFree would file for federal bankruptcy protection, Katia Wanzeler allegedly traveled with her husband’s business partner, Merrill, to fetch more than $27 million in cashier’s checks from a Wells Fargo bank in Connecticut. Most of those checks were made payable to TelexFree entitities, but one of them -- for over $2 million -- was made out to Katia B. Wanzeler.
On May 13, investigators said in their affidavit, “someone in Brazil” bought Katia a one-way ticket there, paying in cash.
The BMW Carlos Wanzeler and his daughter drove to Canada had a license plate registered to Acceris Realty Estate, where Katia is the registered agent, according to the affidavit.
The Wanzelers’ lawyer, Paul V. Kelly, said in a statement, “Ms. Wanzeler has not been charged with any crime and there was no legal impediment to her traveling to Brazil, or anywhere else.’’ He said arresting her was “really unnecessary,’’ noting, “Had the government informed us that they considered Ms. Wanzeler a material witness, I am sure we could have worked something out to arrange her appearance.’’
TelexFree grew into a global concern with thousands of participants by touting its Internet phone service plans, according to regulators and prosecutors. But it allegedly generated nearly all of its money through a pyramid scheme, recruiting people around the world to invest, and promising them quick returns for helping the company post online internet ads, prosecutors allege.
The online ads, however, were a meaningless exercise, prosecutors allege, to hide the true activities of the company. State and federal securities regulators have filed civil fraud charges against the company and its principals. Both Carlos Wanzeler and Merrill also face a criminal charge of conspiracy to commit wire fraud. Each faces 20 years in prison if found guilty.
Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.

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