U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25845 / September 22, 2023
Securities and Exchange Commission v. Empirex Capital LLC and Rafael Alberto Vargas Gonzalez, a/k/a Rafael Vargas, No. 1:23-cv-23627-BB (S.D. Fla. filed Sept. 21, 2023)
SEC Charges South Florida Company and Principal in Offering Fraud Scheme
The Securities and Exchange Commission announced today it filed an action against Empirex Capital LLC and its owner and manager, Florida resident Rafael Alberto Vargas Gonzalez a/k/a Rafael Vargas.
According to the SEC’s complaint, from July 2018 through at least March 2023, Vargas and Empirex raised at least $6.6 million from at least 162 investors, in the U.S. and abroad, purportedly for investments in crypto assets and what they termed traditional investments, which included stocks and bonds. As alleged in the complaint, Empirex never invested in traditional securities and did not use investor funds to purchase crypto assets before February 2021. The complaint alleges Vargas misappropriated approximately $1.8 million of funds obtained from investors to pay for various personal expenses, including jewelry purchases, housing and automobile payments, and for cash. The complaint also alleges Vargas, personally and through entities he controlled, made approximately $1.8 million in Ponzi-like payments to investors. According to the complaint, to convince investors their returns were real and that Empirex was trading profitably, Vargas and Empirex provided investors with fictitious statements. The complaint further alleges Vargas and Empirex made material misrepresentations to investors concerning Empirex’s assets under management, Vargas and Empirex’s qualifications and backgrounds, and the safety and risks of investing with Empirex.
The SEC’s complaint charges Vargas and Empirex with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and seeks permanent injunctions, permanent conduct-based injunctions, disgorgement of ill-gotten gains, civil penalties against Vargas and Empirex, and an officer and director bar against Vargas.
The SEC’s investigation was conducted by Shelly-Ann A. Springer-Charles, Crystal C. Ivory, Julia D’Antonio, and Karaz S. Zaki, and was supervised by Eric R. Busto and Glenn S. Gordon. The SEC’s litigation will be led by Russell Koonin.