Puerto Rico Men Arrested in $12 Million Ponzi Scheme Investigation
Two Florida-Based Businessmen Accused of Masterminding Massive Fraud
Two businessmen, Gary Steven Wykle and Alejandro Cortés López, have been taken into custody by authorities after a 14-count federal indictment accused them of orchestrating a massive Ponzi scheme that defrauded at least 150 investors out of more than $12 million.
The Scheme: A Web of Deceit
The suspects founded a fake financial services company called The Republic Group, Inc., which promised clients their investments in promissory notes would fund loans for companies operating hotels and resorts in the Dominican Republic and other locations. However, authorities allege that Wykle and Cortés falsely assured investors that their money would be used to finance legitimate business ventures.
The Scheme’s True Nature
- Over $1.2 million was siphoned off to cover Wykle’s personal expenses, including shopping sprees, travel, rent, food, and entertainment.
- Cortés received a total of $1.28 million in undisclosed commissions for bringing new investors into the scheme.
The Investigation: A Long-Running Effort
The alleged Ponzi scheme operated from 2010 to 2017, with some victims investing their life savings in The Republic Group, Inc. Authorities are still investigating the extent of the fraud and have yet to determine if the accused have retained legal representation.
The Securities and Exchange Commission’s Role
The Securities and Exchange Commission has also launched an investigation into the matter.
A Warning for Investors: Research Before Investing
The arrest marks a significant milestone in the FBI’s ongoing efforts to combat financial fraud in Puerto Rico and beyond. It serves as a stark reminder for investors to thoroughly research any investment opportunity before committing their funds, and to be wary of promises that seem too good to be true.
Takeaways
- Be cautious of investment opportunities that promise unusually high returns or guaranteed profits.
- Always research the company, its management, and its financials before investing.
- Don’t invest more than you can afford to lose.
- Report any suspicious activity or fraudulent behavior to the authorities immediately.