Leader of firm that cheated people out of $1.8B admits guilt

The president of a Massachusetts-based internet telecom company that prosecutors say was actually a pyramid scheme that cheated about 965,000 people worldwide out of nearly $1.8 billion has pleaded guilty to wire fraud and conspiracy.

James Merrill entered the pleas Monday in federal court in a deal with prosecutors that will limit him to a maximum of 10 years in prison at sentencing Feb. 2.

Prosecutors say the 55-year-old Ashland man was president of TelexFree, which sold VOIP telephone service.

TelexFree had few customers and made most of its revenue from people buying into the company with a promise of payouts for posting online ads for it. They were paid with money from new recruits.

Merrill's lawyer says his client played a limited role in TelexFree but accepts responsibility.