Despite efforts from the US, Brazil is doing its best to ensure TelexFree co-founder Carlos Wanzeler escapes punishment.
Although he worked with accomplices, Carlos Costa in Brazil and James Merrill in the US, Wanzeler is the mastermind behind TelexFree.
TelexFree was a $3 billion Ponzi scheme
shut down by US authorities
back in 2014.
Wanzeler, who held dual Brazilian and US citizenship at the time,
fled to Brazil
before he could be apprehended.
Wanzeler’s US partner-in-crime, James Merrill (right with Wanzeler (L)), was
arrested in 2014
and has
already
served a
six-year prison sentence
.
Wanzeler fleeing to Brazil complicated his criminal proceedings, owing to Brazil’s policy of not extraditing its own citizens.
Pending the outcome of parallel criminal proceedings in Brazil, it seemed Wanzeler would forever remain a fugitive wanted by the US.
Unexpectedly, things changed following a precedent set by the Brazilian Federal Supreme Court in 2017.
Another criminal with dual US and Brazilian citizenship had been stripped of her Brazilian citizenship on the basis she gave up her Brazilian nationality when she was naturalized as a US citizen.
That criminal who US authorities filed an extradition application for in 2013, had her Brazilian citizenship revoked and was subsequently extradited.
In February 2018, Carlos Wanzeler became the second dual-national to be
stripped of his Brazilian citizenship
under the new law.
Two years of appeals later, Wanzeler was finally arrested on a US warrant in February 2020. By September 2020, Brazilian authorities had confirmed Wanzeler was
set to be extradited to the US
.
Throughout Wanzeler’s extradition proceedings, the Brazilian criminal cases against him and Carlos Costa continued in the background.
One of the Brazilian TelexFree criminal cases finally resulted in the
arrest of Wanzeler and Costa in December 2019
.
Unfortunately that didn’t stick and within a few days Wanzeler and Costa were released. The February 2020 execution of the US arrest warrant was actually Wanzeler’s
re-arrest.
Naturally Wanzeler appealed his US warrant arrest. The appeal was granted in March 2020 on the basis
Wanzeler had reapplied for Brazilian citizenship
.
Wanzeler remained in prison but the appeal decision once again put the brakes on his US extradition.
In May 2020, Wanzeler and Costa were convicted in the same case that led to their December 2019 arrest.
On charges related to running an “unregistered fraudulent banking institution”, Wanzeler and Costa were each
sentenced to 12 years and 6 months in prison
.
Wanzeler and Costa both appealed their convictions. Meanwhile, under appeal or not, Wanzeler’s Brazilian sentence was another roadblock to his US extradition.
Following a petition to then Brazilian President Jair Bolsonaro, Wanzeler was released from prison (where he was still being held on the US extradition warrant) in August 2021.
Bolsonaro ordered Wanzeler’s release on the basis his “extr
🤖 Quick Answer
What was TelexFree and who founded it?TelexFree was a $3 billion Ponzi scheme operated internationally, with Carlos Wanzeler as its mastermind alongside accomplices Carlos Costa in Brazil and James Merrill in the United States. US authorities shut down the fraudulent operation in 2014 after it defrauded thousands of investors worldwide through its illegal pyramid structure.
Why did Carlos Wanzeler escape prosecution in the United States?
Wanzeler held dual Brazilian and US citizenship and fled to Brazil before US authorities could apprehend him. Brazil's non-extradition policy for its own citizens prevented his transfer to American jurisdiction, complicating efforts to prosecute him for his role in the TelexFree scheme.
What happened to Wanzeler's co-conspirators?
James Merrill, Wanzeler's US partner,
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