The Brazilian has already been registered to another team during this transfer window.
The collapse of the deal has nothing to do with the current transfer embargo at the City Ground. Instead it is due to Moritz having been registered to another team already during the current transfer window.
Forest had been waiting for confirmation for a week now but it looks as though FIFA failed to ratify the deal.
The 29-year-old played under Freedman at both Crystal Palace and Bolton Wanderers before leaving England in 2014.
He has been playing in Asia for the past two years. He played for Mumbai City of India in two separate stints, South Korean side Pohang Steelers and most recently Buriram United.
He joined the club in December 2015 but terminated his deal without playing a game for the side last month.
Moritz had traveled to Nottingham to sign the deal but it is now not known what his next move will be.