U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21904 / March 28, 2011
Securities and Exchange Commission v. Gaston E. Cantens and Teresita Cantens, Case No.: 10-CV-20635-PAS (S.D. Fla.)
DISTRICT COURT ENTERS FINAL JUDGMENT AGAINST DEFENDANTS GASTON E. CANTENS AND TERESITA CANTENS
The Commission announced that on March 24, 2011, the United States District Court for the Southern District of Florida entered a final judgment against defendants Gaston E. Cantens and Teresita Cantens.
The consented final judgment permanently restrains and enjoins the Cantens from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5 promulgated thereunder; provides for full injunctive relief and disgorgement, on a joint and several basis, of $5,276,750, along with prejudgment interest of $88,297.62; and forgoes seeking payment of civil penalty under Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act based on the Cantens’s asserted inability to pay as evidenced by their sworn financial statements and supporting documents submitted to the Commission staff.
The complaint filed by the Commission on March 3, 2010, alleged among others that the Cantens, through their company, Royal West Properties, Inc. (“Royal West”), a Miami, Florida-based real estate developer, conducted an affinity fraud and Ponzi scheme that raised over $135 million from more than 400 investors, primarily from South Florida’s Cuban exile community. From at least 1993 through January 2009, Royal West offered and sold promissory notes to investors by guaranteeing 9%-16% annual returns over a set period of years. Royal West, however, operated at a loss since at least 2002 and used new investor funds to pay principal and interest to earlier investors and to fund its ongoing business operations. As of May 2009, when investors placed Royal West into involuntary bankruptcy, it owed investors approximately $47.7 million in principal alone, which Royal West had no ability to repay.
For additional information, see LR-21430 (March 3, 2010).