SEC Charges “Entrepreneur” with $360K Fraud
The Securities and Exchange Commission announced that it has charged Diana Mae Fernandez, a “self-styled entrepreneur,” with conducting a $360,000 fraudulent securities offering.
The SEC’s complaint alleges that, between 2018 and 2020, Fernandez—through her alter ego entities “The Self-Made Success” and “Diana Mae K., LLC”—orchestrated a scheme by touting the false narrative that she was a successful businesswoman and experienced trader and financier with access to no-risk, short-term investments and guaranteed returns as high as 63 percent.
Fernandez induced investors to participate in the fraudulent securities offering by claiming that she would use their money to invest in, among other things, private and publicly traded companies, crypto assets, and luxury real estate properties. Instead, Fernandez allegedly used any investor funds to pay for her day-to-day living expenses, lavish hotel stays, fund numerous cash withdrawals, and make Ponzi-like payments to earlier investors.
Fernandez recruited many of her investors through church groups and social networking geared toward entrepreneurs. She then developed those relationships to recruit additional investors. In total, Fernandez fraudulently raised more than $364,000 from at least 20 investors through false and misleading statements and omissions, both orally and in writing, including an alleged “investor packet” which stated that Fernandez had over 15 years of investment experience and had raised $100 million across 25 countries. Fernandez instructed her victims to wire money directly to her bank account or to send funds to her PayPal address.
According to the SEC complaint, Fernandez’s checking account balance displayed a regular pattern of being spent down to depletion, at which time she would find another victim to refill her account. She would then use the funds to purchase airline tickets, hotel and spa expenses, restaurant visits, and more.
Fernandez used a variety of tactics to hide her activities and avoid returning funds including providing false investment returns and telling investors they could “roll over” investments when investors sought to redeem. She also allegedly falsified quarterly updates and altered emails to suggest that she had initiated wire transfers that her bank had stopped because of a security alert.
The SEC’s complaint, filed in federal district court in the Northern District of West Virginia, charges Fernandez with violations of the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, civil monetary penalties, and an officer-and-director bar against Fernandez.
Fernandez is currently under arrest in Serbia and awaiting extradition to the United States.
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