About $20m was seized from under a mattress in a Massachusetts apartment after a Brazilian man was arrested for laundering money linked to a multi-billion dollar global fraud.
Federal prosecutors in Boston charged Cleber Rene Rizerio Rocha, 28, with conspiring to commit money laundering in a case connected to the investigation of TelexFree Inc, which promoted itself as an internet telecom company but was actually a pyramid scheme according to prosecutors.
Rocha was detained following a court hearing, prosecutors said.
His lawyer did not immediately respond to a request for comment.
The arrest stemmed from an investigation into TelexFree, a Marlborough, Massachusetts-based company that sold voice-over-internet telephone services and was founded by James Merrill, a US citizen, and Carlos Wanzeler, a Brazilian.
Prosecutors allege TelexFree was a massive pyramid scheme, making little or 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 filed for bankruptcy in April 2014 owing $5bn to its participants, prosecutors said. In total 965,225 victims in the United States, Brazil and various other countries lost $1.76bn when it collapsed, they said.
Merrill was arrested in May 2014 and pleaded guilty to conspiracy and wire fraud charges in October.
Wanzeler in 2014 fled to Brazil and could not be extradited.
According to Thursday’s criminal complaint, in 2015 an individual working on Wanzeler’s nephew’s behalf approached a cooperating witness about laundering money still in the United States through Hong Kong accounts and moving the funds to Brazil.
The intermediary told the witness that she wanted $40m transferred out of the country because Wanzeler’s wife, still in the United States, was filing for divorce and knew where it was located, the complaint said.
On 31 December, Rocha, allegedly acting as a courier for Wanzeler’s nephew, flew to the United States and subsequently met on Wednesday with the cooperating witness, whom he gave $2.2m in a suitcase, according to authorities.
After the meeting federal agents followed Rocha to an apartment complex in Westborough, Massachusetts.
They returned to it after arresting Rocha to find a “substantial amount of cash” hidden under a mattress, the complaint said. Rocha said the money totalled $20m, the complaint said.
Wanzeler’s lawyer did not immediately respond to a request for comment.