Puerto Rico Ponzi Scheme: Empires Consulting Corp. and Co-Defendants Ordered to Pay $64 Million in Restitution and Fines
Massive Ponzi Scheme Uncovered
A federal court has ordered Empires Consulting Corp. and its co-defendants to pay $64 million in restitution and fines for their role in a massive Ponzi scheme that targeted over 12,500 individuals in Puerto Rico and around the world.
How the Scheme Worked
According to court documents, Empires Consulting Corp., Emerson Pires, Flavio Goncalves, and Joshua Nicholas allegedly solicited more than $41.6 million from investors between September 2020 and February 2022 by promising high returns on investments in commodity futures and binary options. However, investigators found that the defendants only deposited a small portion of the funds into actual trading accounts and used the majority for personal expenses.
Restitution and Fines
Under the terms of a proposed consent order to resolve claims against the defendants, Empires Consulting Corp. will pay $32 million in restitution and an additional $32 million as a civil monetary penalty.
The Consequences
Nicholas is currently serving a 51-month prison sentence for securities fraud related to the scheme. Pires and Goncalves are believed to be hiding in Brazil, where they are wanted by authorities on charges of fraud and money laundering.
Importance of Investor Protection
This latest Ponzi scheme serves as a stark reminder of the importance of investor protection and the need for regulators to remain vigilant in their efforts to combat financial fraud. The Commodity Futures Trading Commission (CFTC) has made it clear that it will not tolerate such schemes and will take swift action to hold perpetrators accountable.
Other Cases
The case is just one example of the many Ponzi schemes that have been uncovered in recent years, including a scheme targeting Spanish speakers in Puerto Rico and the continental United States, as well as another scheme involving digital assets. The CFTC has charged multiple defendants with fraud and misappropriation of funds in connection with these schemes.
Investigation and Collaboration
The investigation into Empires Consulting Corp.’s activities was led by the CFTC’s Division of Enforcement and the U.S. Attorney’s Office for the District of Puerto Rico. The case is a reminder that financial regulators will continue to work together to protect investors and bring perpetrators of fraud to justice.
Takeaways
- Ponzi schemes can target anyone, regardless of location or language.
- Financial regulators are working tirelessly to combat financial fraud and protect investors.
- Investor protection is crucial in preventing such schemes from occurring.