Source: 7/15/2014

U.S. Challenges Merrills Bid for Access to Funds in TelexFree Case

July 14, 2014 -- U.S. prosecutors asked the U.S. District Court in Boston to deny James Merrill's request for access to $4 million in funds currently frozen by the Securities and Exchange Commission. Merrill, a co-founder of TelexFree, requested access to the funds to help pay for his defense.

U.S. Attorney Mary B. Murrane, in a 15-page submission to the court, said "The funds Merrill asks the court to release...are investor funds - money victims gave to TelexFree during the course of the alleged fraud. The defendant cannot use forteitable victim funds to pay for his defense, much less an unusually expensive one."

Merrill, who has been charged with conspiracy to commit wire fraud, claimed in his initial request to the court that he needed "extraordinary funds" to pay for his legal defense and that it is the government's responsibility to prove the money was connected to the charge against him.

U.S. Attorney Murrance argued that defendants are not entitled to a hearing to determine whether their assets were obtained from their alleged crime. She also said that Merrill did not adequately explain why he needed such a large amount to pay for his defense, nor did he prove he did not have any other assets at his disposal. She asked the court to deny his request for the funds and his request for a hearing on the matter.

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