U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23762 / March 2, 2017
Securities and Exchange Commission v. Renato Rodriguez and Gutemberg Dos Santos, No. 17-civ-00375 (C.D. Cal. filed Mar. 2, 2017)
SEC Charges Promoters Behind Pyramid Scheme
The Securities and Exchange Commission today announced that two promoters agreed to settle charges that they conducted a pyramid scheme in Southern California.
The SEC alleges that Renato Rodriguez of Downey, Calif., and Gutemberg Dos Santos of Las Vegas operated a business called Vizinova, secured investments from at least 100 investors, and proceeded to spend $1.4 million of investor funds for personal expenses, including the purchase of a home and a Lamborghini. Their alleged scheme centered on a promise that investors would earn "points" that would yield a certain rate of return, typically $5,000 on an investment of $3,200. Rodriguez and Dos Santos allegedly conducted live presentations to investors and emphasized recruitment of other investors within their ethnic communities.
According to the SEC's complaint, very few products actually existed for purchase or sale, and the accumulated points were irredeemable and worthless. Rodriguez and Dos Santos allegedly sold the points they accumulated to other investors.
Rodriguez and Dos Santos agreed to settle the SEC's charges. Without admitting or denying the allegations in the SEC's complaint, they agreed to pay $1.4 million in disgorgement plus penalties of $160,000 each. The settlement is subject to court approval.
The SEC's investigation was conducted in the Los Angeles office by Peter Del Greco with assistance from Lynn M. Dean. The case was supervised by Marc Blau.
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Read the SEC's investor alert warning about the dangers of potential investment scams involving pyramid schemes posing as multi-level marketing programs.