International Law

Ponzi Enabler Charged

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From the FBI Press Release:

A Mexican national who allegedly ran a bogus investment program that promised primarily Spanish-speaking victims a 100 percent return on their investments has been arrested on a federal charge of bribing a bank official who allegedly took payments in exchange for covering up activities related to the fraud scheme.

Juan Rangel, 44, was arrested Friday afternoon by special agents with the Federal Bureau of Investigation following the execution of a search warrant at his Downey residence.

Rangel was named in a criminal complaint filed Saturday morning that accuses him of bribing an employee of a financial institution.

Rangel is scheduled to make his initial court appearance this afternoon in United States District Court in Los Angeles.

The affidavit in support of the criminal complaint outlines an alleged scheme in which Rangel paid a branch manager with Bank of America to cover up bank activities in order to further his investment fraud scheme.

Among other things, Ranel believed that in exchange for these payments the bank manager would accept large cash deposits and not file federally mandated Cash Transaction Reports, which are required for all cash transactions over $10,000.

The affidavit goes on to allege that the cash was generated from a Ponzi scheme that Rangel operated, a scheme that took millions of dollars from victims who thought they were investing in a program to loan money to distressed homeowners.

Rangel allegedly promised up to a 100 percent rate of return and encouraged victims to use money from home equity lines of credit to invest in the scheme that collapsed last month.

Rangel owned and operated Financial Plus Investments (FPI), which was based in Commerce. According to the complaint, FPI advertised heavily in Spanish-language media, such as the Rangel-backed magazine "Si," Spanish-language flyers, and on radio and television.

One of the flyers advertised FPI's investment programs, promising investors a 100 percent return on their investments and explaining that if someone invested $25, they would gain an additional $25 on that investment. The advertisements assured potential investors that investments were protected, explaining that investments would be backed by "titles of property."

Full post as published by Misleading Advertising Law on August 19, 2008 (boomark / email).