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In response to a 2017 ruling, James Merrill and the TelexFree Trustee have recently settled.

The $3,600,000 judgment that the SEC had obtained in 2017 had already been paid through forfeiture in Merrill’s criminal prosecution.

An extra $3 million, paid to Merrill (right) through TelexFree in 2013, was being sought by the TelexFree Trustee.

The Transfers and several additional payments made to the Principals within two years of the Petition Date were attempted to be recouped by the Trustee as being real and/or constructively fraudulent transfers under the Bankruptcy Code.

In April 2014, TelexFree filed for bankruptcy to escape growing Ponzi obligations.

Merrill is now impoverished as one might expect given his illegal behavior and the accompanying IRS and DOR harassment.

Merrill has claimed that he lacks the resources necessary to pay the Trustee’s judgment and that, in addition to the claims made by the IRS and DOR, Merrill also owes money for unpaid professional fees and loans from unrelated parties.

In Merrill’s settlement, the parties agree to lower the judgment to one count and $3,000,000 to achieve this.

Any funds the Trustee can get from TelexFree’s other Principals, Carlos Wanzeler and Carlos Costa would be deducted from Merrill’s settlement award by 50%, dollar for dollar.

Carlos Wanzeler and Carlos Costa were previously the subjects of judgments by default against them, totaling $3,785,192 and $3,658,900, respectively.

In 2017, Merrill was given a six-year jail term. In 2022 on January 13th, he was liberated.

Merrill has claimed that it is experiencing financial difficulties, including being unable to pay for regular bills as they come due and having no unencumbered assets.

Carlos Wanzeler, who had fled the US for Brazil where he thought he would be safe, was detained on behalf of the US government in 2020.

Wanzeler (right, with Merrill) has been stuck in extradition limbo since late 2020.

Carlos Costa stayed in Brazil and, despite several criminal investigations, seems to have escaped significant responsibility.

The media in Brazil announced in 2020 that Costa had received a twelve-year jail term.

Despite this, nobody knows Costa’s present situation.

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