The president of TelexFree Inc., a pyramid scheme disguised as an Internet telecom company, recently pleaded guilty to one count of wire fraud conspiracy and eight counts of wire fraud in U.S. District Court in Worcester.

Between February 2012 and April 2014, James Merrill, of Ashland, was the president of TelexFree, which sold a “voice-over-Internet-protocol” telephone service similar to Skype. The website was maintained by TelexFree, and was a pyramid scheme whereby all of the money the company paid out came from new participants continuously paying to sign up as promoters for the company. Participants were also given substantial financial incentives to recruit others to join the scheme.

In December 2013, Merrill wired himself and two co-conspirators a total of $10 million from TelexFree accounts. On April 14, 2014, Telexfree filed for bankruptcy, at which point it owed approximately $5 billion to its participants, while having only about $120 million on hand (approximately 2 percent of what it owed). At that point, approximately 965,225 participants lost money in the scheme, with total losses of about $1,755,927,755.

According to the terms of the plea agreement, Merrill will be sentenced to no more than 10 years in prison. Merrill also agreed to forfeit approximately $140 million, numerous real estate properties, luxury vehicles and boats.