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Alleged Investment Scam Artists Agrees to Repay $81 Million in Investor Funds

March 23, 2018 Blog

In February, the Securities and Exchange Commission (SEC) announced that it has reached a settlement with an alleged investment scam artist who, according to the SEC’s complaint, misused more than $81 million in investor funds. While the claimed businessman reportedly told investors that their money would be used to fund the construction of a ski resort and biomedical research facility, records indicate that he actually used their funds to purchase other properties for his own personal and business use.

According to the SEC’s press release, the investigation into the alleged fraud is still continuing. However, the alleged scam artist has reportedly agreed to pay:

“[M]ore than $81 million in disgorgement of ill-gotten gains plus a $1 million penalty, and he must forfeit approximately $417,000 in cash that was frozen after the SEC filed the case. [He] also agreed to surrender ownership of the two condos and ski resort he purchased with investor funds and give up his stake in more than a dozen other properties. . . . Under the proposed settlement, the properties would be turned over to the court-appointed receiver in the case for the purpose of selling them for the benefit of defrauded investors.”

A “Massive Fraud” Targeting More than 700 Investors from at Least 74 Countries

SEC records indicate that the alleged scam artist, Ariel Quiros, fraudulently solicited investments through the EB-5 Immigrant Investor Program. This is a federal program administered by U.S. Citizenship and Immigration Services (USCIS) that awards visas to individuals who invest in commercial enterprises in the United States. As reported by the SEC, not only did Quiros’ scam result in significant financial losses for more than 700 foreign investors from at least 74 different countries, but it also jeopardized their eligibility to remain in the United States under the EB-5 Immigrant Investor Program.

The Importance (and Limitations) of Conducting Thorough Due Diligence Before Investing

Prior to investing in any potential investment opportunity, it is critical to conduct thorough due diligence. Fraud schemes will often exhibit a variety of hallmarks, and knowing how to spot the warning signs for fraud can help you avoid losing money in a fraudulent investment. In many cases, scam artists will employ tactics specifically designed to make their offerings appear more legitimate, such as purporting to operate under the EB-5 Immigrant Investor Program or falsely claiming affiliation with the Financial Industry Regulatory Authority (FINRA) or another official organization.

However, as investment fraud scams become increasingly sophisticated – and with many scams involving licensed and registered brokers and advisors – it can often be extremely difficult to determine whether an investment opportunity is actually a fraud. As an investor, the key is to be as diligent as possible, avoid jumping for opportunities that seem too good to be true, and seek help at the first sign of fraudulent investment losses.

Are You Concerned about Investment Fraud? Contact Us for a Free Consultation

If you are concerned about investment fraud and would like to discuss your situation with an attorney, we encourage you to get in touch. Our firm provides nationwide legal representation for investors who have suffered fraudulent investment losses. To speak with an experienced attorney in a free and confidential consultation, please call (646) 663-5628 or inquire online today.