SEC Charges Five Individuals for $15 Million Ponzi Scheme
The Securities and Exchange Commission announced charges against Mexico-based company Aras Investment Business Group S.A.P.I. de C.V., its CEO Armando Gutierrez Rosas, and four individuals for fraudulently raising at least $15 million from more than 450 retail investors in the U.S., most of whom were members of the Mexican American community.
The SEC’s complaint alleges that, from around March 2020 through November 2021, Gutierrez raised money from retail investors in the U.S. for the purported purpose of investing in U.S. real estate and mining operations in Mexico, promising investors monthly returns as high as 10%.
According to the complaint, no U.S. investor funds were used for investment purposes; instead, Gutierrez was operating a Ponzi scheme and affinity fraud and used investor funds to pay for his personal expenses including a $2.5 million mansion in Texas. Along with Gutierrez, the SEC also charged Efren Quiroz, Luis Quiroz, Maria Tolentino, and Diayanira Rendon for their roles in the alleged fraud.
“Our investigation uncovered this egregious fraud that cost the investors involved more than $6 million,” said Melissa R. Hodgman, associate director in the SEC’s Division of Enforcement. “We are committed to holding promoters of these types of affinity frauds accountable.”
The SEC’s complaint charges Gutierrez and Aras with violating the antifraud and registration provisions of the federal securities laws; charges Efren and Luis Quiroz with acting as unregistered brokers and, along with Tolentino, with violating the registration provisions and aiding and abetting Gutierrez’s and Aras’s violations of the antifraud provisions; it also charges Rendon with aiding and abetting Gutierrez’ and Aras’ violations of the antifraud provisions. The SEC’s complaint seeks permanent injunctions, civil penalties, and disgorgement with prejudgment interest.
Without admitting or denying the allegations in the complaint, Efren and Luis Quiroz, Tolentino, and Rendon consented to the entry of judgments against them as to all claims, including full injunctive relief against future violations, with disgorgement and penalties to be determined by the court upon motion by the Commission. The settlements are subject to court approval. Efren and Luis Quiroz also consented to settled Commission orders barring each of them from association with a registered entity or participation in a penny stock offering.
The SEC’s Office of Investor Education and Advocacy has also issued an Investor Alert with tips on how investors should avoid investment decisions based solely on common ties with someone recommending or selling the investment.
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