U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23351 / September 17, 2015
Securities and Exchange Commission v. Tropikgadget FZE, et al., Civil Action No. 1:15 cv 10543-ADB (United States District Court for the District of Massachusetts)
SEC Obtains Final Judgment Against Promoter of Pyramid Scheme Targeting Latino Communities
The Securities and Exchange Commission today announced that on September 16, 2015, the federal court in Boston, Massachusetts, entered a final judgment against defendant Julio G. Cruz of Duluth, Georgia, a defendant in a previously-filed enforcement action. In February 2015, the Commission charged two Portuguese companies operating under the name Wings Network, plus three company officers and 12 promoters of Wings Network, including Cruz, with perpetrating an international pyramid scheme targeting Latino communities in the U.S.
In settling the SEC's charges, Cruz admitted that he was a promoter of defendants Tropikgadget Unipessoal LDA and Tropikgadget FZE, which operated under the name Wings Network, appearing in promotional videos on the internet and traveling to several states, including Texas, during 2014 to present at Wings Network promotional events. Cruz also admitted that while in Texas he solicited friends to attend a Wings Network presentation given by Wings Network principal Carlos Barbosa, who touted the Wings Network opportunity. Barbosa is also a defendant in the Commission's enforcement action.
Cruz consented to the entry of the judgment entered by the United States District Court of the District of Massachusetts, which permanently restrains and enjoins him from violating the unregistered securities offering provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The judgment also permanently restrains and enjoins him from offering, operating, or participating in any marketing or sales program in which a participant is compensated or promised compensation solely or primarily (1) for inducing another person to become a participant in the program, or (2) if such induced person induces another to become a participant in the program. Finally, the judgment orders Cruz to pay a total of $3,232.32 in disgorgement of ill-gotten gains, prejudgment interest, and a civil penalty.
In addition, on September 14, 2015, the Commission voluntarily dismissed charges against defendant promoter Pablo Andres Garcia.
The Commission's litigation in this matter continues against the Tropikgadget companies, their officers and the remaining promoters of the Wings network pyramid scheme.
The SEC's investigation was conducted by Scott R. Stanley, Dawn Edick, John McCann, Deena Bernstein, and Amy Gwiazda of the SEC's Boston Regional Office. The SEC's litigation is being led by Ms. Bernstein and David London.
For further information, see Litigation Release No. 23209 (February 27, 2015)(SEC Charges Operators of International Pyramid Scheme Targeting Latino Communities).