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REFILE-UPDATE 1-Brazilian who led U.S. to $17 mln under mattress to plead guilty
October 11, 2017 / 7:32 PM / in 2 months

REFILE-UPDATE 1-Brazilian who led U.S. to $17 mln under mattress to plead guilty

(Refiles to fix typo in first paragraph.)

By Nate Raymond

BOSTON, Oct 11 (Reuters) - A Brazilian whose arrest led U.S. authorities to discover $17 million hidden under a mattress is expected to plead guilty next week after being charged with trying to launder funds tied to one of the largest pyramid schemes ever.

Cleber Rene Rizerio Rocha, who prosecutors said tried to help get money out of the United States that a co-founder of TelexFree Inc left behind when he fled the country, had been set to enter his plea in federal court in Boston on Wednesday.

Due to an issue with an interpreter, the hearing was rescheduled for Oct. 19. Rocha, 28, faces conspiracy and money laundering charges. His lawyer did not respond to a request for comment.

Rocha’s case stemmed from an investigation of TelexFree, a 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.

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 collapsed in 2014, inflicting more than $3 billion in losses on nearly 1.89 million people worldwide, prosecutors said.

Merrill was arrested in 2014. He was sentenced in March to six years in prison after pleading guilty to conspiracy and fraud charges.

Wanzeler in 2014 fled to Brazil, where he cannot be extradited from, prosecutors said. They say that in the process, Wanzeler left behind tens of millions of dollars he laundered from TelexFree accounts.

In mid-2015, Leonardo Casula Francisco, Wanzeler’s nephew, asked a cooperating witness to help transfer cash hidden in the greater Boston area out of the United States, an indictment said.

The pair agreed 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, an indictment said.

Prosecutors said that following 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.

After Rocha was arrested, he helped agents locate the apartment, leading them to find $17 million hidden under a mattress, prosecutors said. (Reporting by Nate Raymond in Boston; Editing by Lisa Shumaker and Leslie Adler)

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