Business

TelexFree president appeals his detention

Lawyers for James Merrill are asking to have him released while he awaits trial on fraud charges.

telex media

Lawyers for James Merrill are asking to have him released while he awaits trial on fraud charges.

Lawyers for TelexFree Inc. president James Merrill have filed an appeal to have him released from prison while he awaits trial on criminal fraud charges, citing “heated rhetoric” in the government’s effort to hold him.

In a filing Tuesday in federal court in Worcester, Merrill’s lawyers accused prosecutors of making speculative arguments “in the heat of the moment” to support their case that the executive is a flight risk.

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They argued that TelexFree, the Marlborough company allegedly at the center of a huge pyramid scheme, may have had significantly more revenue from selling long-distance phone service than the $1.3 million regulators alleged.

They said revenue for the product “may have amounted” to more than $200 million.

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TelexFree filed for bankruptcy protection in April, days before federal agents raided its office. The company had already been shut down in Brazil, where it started, in June 2013.

Merrill and his business partner, Carlos Wanzeler, have been charged with criminal fraud for running an alleged pyramid scheme. Merrill was arrested last month, but Wanzeler fled the country for his native home in Vitoria, Brazil.

Merrill’s lawyers on Tuesday argued again that the lifelong Massachusetts resident is not a flight risk. They said as conditions for his release, Merrill would be willing to submit to home detention, to wear a GPS tracking device, and to give up his passport. He would also put up a $900,000 personal bond, they said.

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They also noted that “unlike his codefendant, Mr. Merrill did not flee, despite advance notice of the government’s criminal investigation.’’

There were 31 letters submitted on his behalf by family and friends, including one by his wife of 23 years, Kristin, who called Merrill a man of integrity who loves his family and “would never abandon us.’’

Prosecutors filed their opposition to the appeal, saying the alleged TelexFree fraud was “not the usual white collar case.’’ They said “pressure on Merrill will be enormous” to flee, because he faces potential life in prison.

With up to 1 million investors in dozens of countries, the government said Merrill and Wanzeler “hid the fact TelexFree was a huge, teetering pyramid scheme,’’ that took in more than $1 billion from participants.

A judge will hear the appeal Thursday.

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.
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