Thursday, June 3, 2010

South Florida Jeweler Charged With Operating $40 Million Ponzi Scheme

Luis Felipe Perez, 38, of Miami, Florida, has been charged by the Securities & Exchange Commission of operating a Ponzi-type investment fraud scheme that defrauded investors out of as much as $40 million. The SEC alleges that Perez, who has been charged with six counts of securities fraud, used his personal and family relationships to lure about 35 mostly Hispanic people to invest in his jewelry business, pawn shops in New York or in diamonds he held claimed to hold in a safety deposit box, promising returns of up to 10 percent per month. However, authorities believe Perez used the investment funds to pay earlier investors and to live a lavish lifestyle. Perez, who is president of Lucky Star Diamonds Inc. and Luis Felipe Jewelry Design Corp. reportedly began his fraudulent scheme in 2006 and continued until it fell apart in June 2009 when he could no longer repay investors. Perez' lavish lifestyle included a $3.2 million home, $1 million worth of jewelry, exotic vacations that cost him $200,000 a year, a private jet, expensive artwork and $100,000 in political contributions.

Read the story here and here.

Read the SEC complaint here.

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