Home News SEC Charges Adviser for Ponzi Scheme, Fraud and Embezzlement

SEC Charges Adviser for Ponzi Scheme, Fraud and Embezzlement

The Securities and Exchange Commission filed charges against a New York investment adviser, Ruless Pierre, for operating a multimillion-dollar Ponzi scheme, creating fraudulent partnership interests in a fast food franchise, and embezzling money from a former employer.

The Securities and Exchange Commission has filed charges against a New York investment adviser, Ruless Pierre, for operating a multimillion-dollar Ponzi scheme masquerading as an investment club and commingling investors’ funds with his own personal investments in various brokerage accounts held in his own name.

“We allege that Pierre’s Amongst Friends investment opportunity that targeted members of Pierre’s local Haitian community was built on a foundation of lies and deceit,” said Marc P. Berger, director of the SEC’s New York regional office.

It is alleged that in 2016, each member of the Amongst Friends Investment Group, including his family and friends, invested $2,500. He had apparently incentivized investors with the promise of unrealistically high rates of return of at least 20 percent every 60 days.

By March 2017, Pierre allegedly raised more than $2 million from at least 100 investors, predominately Haitian New Yorkers, who purchased high-yield promissory notes through Amongst Friends.

Yet Pierre incurred heavy losses trading securities which he allegedly concealed by using new investor funds to pay older investors and issuing false account statements showing investment gains.

In addition, the SEC alleges that Pierre fraudulently raised at least $375,000 from more than 15 investors related to a scheme involving the sale of partnership interests in a fast food chain through his business, R. Pierre Consulting Group LLC.

The SEC claims that in November 2018, Pierre started selling partnership interests in a fast food franchise, with agreements that falsely guaranteed monthly returns of 10 percent (60 percent per year), plus quarterly profit sharing. When he sold these interests, Pierre apparently knew that the franchise could not provide sufficient profits to pay investors the promised returns, the regulators said.

Pierre allegedly further financed the fraud by using money that he embezzled from a former employer to make interest payments to investors. He purportedly took money from his former employer’s accounts by writing checks to “Cash” and “Petty Cash,” and continued to do so even after his employment until the management company closed those accounts.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Pierre with violating the antifraud provisions of the federal securities laws. The complaint also names R. Pierre Consulting Group LLC as a relief defendant.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Pierre.

Click here to visit The DI Wire directory sponsor page.