SEC Charges Ruless Pierre for Running a Community Based Ponzi Scheme Targeting the Haitian Community
Litigation Release No. 24670 / November 21, 2019
Securities and Exchange Commission v. Ruless Pierre a/k/a Rules Pierre, 19-cv-10299 (S.D.N.Y.)
On November 6, 2019, the Securities and Exchange Commission filed charges against Ruless Pierre, a/k/a/ Rules Pierre who ran an investment club called the Amongst Friends Investment Group that operated as a fraudulent Ponzi scheme. From at least March 2017, Pierre allegedly raised over $2 million from at least 100 investors, predominately Haitian New Yorkers, who purchased high-yield promissory notes through Amongst Friends. As alleged, Pierre induced investors by promising unrealistically high rates of return of at least 20% every 60 days. In reality, the complaint alleges that Pierre incurred heavy losses trading securities and concealed them by using new investor funds to pay older investors and issuing false account statements showing investment gains. Pierre allegedly further financed the fraud by using money that he embezzled from a former employer to make interest payments to investors.
The SEC's complaint also alleges that Pierre fraudulently raised at least $375,000 from more than 15 investors related to a scheme involving the sale of partnership interests in a fast food chain. In or about November 2018, Pierre began to sell partnership interests in a fast food franchise, with agreements that falsely guaranteed monthly returns of 10% (60% per year) plus quarterly profit sharing. As alleged, at the time he sold these interests, Pierre knew that the franchise could not provide sufficient profits to pay investors the promised returns.
The SEC’s complaint, filed in Federal District Court in the U.S. District Court for the Southern District of New York, charges Pierre with violating Section 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 thereunder and Section 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) and Rule 206(4)-8 thereunder. The complaint also names R. Pierre Consulting Group LLC as a relief defendant.
The SEC's investigation was conducted by Rhonda L. Jung, Teresa A. Rodriguez, George O'Kane, Todd D. Brody, and Adam S. Grace, under the supervision of Lara Shalov Mehraban. An SEC compliance examination that contributed to the investigation was conducted by Thomas Day, Edward J. Janowsky and supervised by Steve C. Vitulano. The SEC's litigation is being led by Todd D. Brody. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the El Dorado Task Force of the Department of Homeland Security.