SEC Obtains Final Judgments Against Pyramid Scheme Mastermind and Promoters
Litigation Release No. 24652 / October 29, 2019
Securities and Exchange Commission v. DFRF Enterprises LLC, et al., Civil Action No. 1:15- cv-12857-PBS (D. Mass. filed June 30, 2015)
On October 22, 2019, the U.S. District Court for the District Court of Massachusetts entered final judgments against the orchestrator and four promoters of a pyramid and Ponzi scheme involving two purported gold mining companies.
In June 2015, the SEC charged Daniel Fernandes Rojo Filho, Heriberto C. Perez Valdes, Eduardo N. Da Silva and Jeffrey A. Feldman of Florida, Romildo Da Cunha of Brazil, Wanderley L. Dalman and Gaspar C. Jesus of Massachusetts, Massachusetts-based DFRF Enterprises LLC, and Florida-based DFRF Enterprises, LLC for their roles in a pyramid and Ponzi scheme that targeted investors in Spanish and Portuguese-speaking communities. The SEC alleged that investors were falsely told that the DFRF entities, purported gold mining companies, owned more than 50 gold mines in Africa and Brazil, and that an investment in these companies would be fully insured and guaranteed. The defendants allegedly raised more than $15 million from at least 1,400 investors between 2014 and 2015 by recruiting new members in pyramid scheme fashion to keep the fraud afloat. Commissions were allegedly paid to earlier investors in a Ponzi-like fashion to encourage their recruitment efforts.
The court entered final judgments by default against Filho, Da Cunha, Dalman, Jesus, and Da Silva, enjoining them from violating the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments further ordered Filho, Da Cunha, Dalman, Jesus, and Da Silva to pay disgorgement and prejudgment interest of $10,269,827, $170,765, $98,064, $104,504, and $266,006, respectively. Filho was ordered to pay a $1 million civil penalty, and Da Cunha, Dalman, Jesus, and Da Silva were each ordered to pay civil penalties of $160,000.
The SEC previously obtained final judgments against the DFRF entities and Valdez. The SEC's litigation in this matter continues against alleged promoter Feldman.