SEC Charges Three South Florida Residents Targeting Haitian-American Investors in Ponzi Scheme
FOR IMMEDIATE RELEASE
Washington, D.C., Oct. 16, 2009 — The Securities and Exchange Commission today charged three South Florida residents with conducting a Ponzi scheme and affinity fraud that collected at least $14.3 million from hundreds of Haitian-American investors residing in South Florida and New Jersey.
The SEC alleges that Ronnie Eugene Bass, Jr., Abner Alabre, Brian J. Taglieri and their companies, HomePals Investment Club LLC and HomePals LLC (HomePals), conducted the scheme from April 2008 to December 2008 by selling unsecured notes and promising to double investors’ money every 90 days. Bass claimed he could generate such spectacular returns through his purported expertise in trading stock options and commodities, however he only traded approximately $1.2 million of the $14.3 million raised and generated trading losses of 19 percent. HomePals used the bulk of the investor funds to repay earlier investors in typical Ponzi scheme fashion, and Bass, Alabre and Taglieri misappropriated at least $668,000 of investor funds for personal use.
“The extraordinary promises made by these three men spread by word of mouth throughout a close-knit community,” said Glenn Gordon, Associate Director of the SEC’s Miami Regional Office. “Bass presented himself as a master trader of stock options and commodities, when in reality he was a master of deceit.”
The SEC alleges that Bass and Alabre used at least $380,000 of investors’ funds to pay for a house where they both resided until recently. Bass misappropriated an additional $28,000 for himself, part of which he used to purchase an automobile. Taglieri diverted $85,000 of investor funds to pay his overdue child support obligations.
The SEC’s complaint alleges that most of the funds raised in the scheme came through the use of investment clubs that were formed for the sole purpose of investing with HomePals. Investment club presidents were offered and paid commissions as a reward for bringing in additional investors. HomePals received pooled funds from as many as 64 investment clubs.
The SEC’s complaint charges each of the defendants with violating the securities registration and antifraud provisions of the federal securities laws. The complaint also charges Bass with violations of the Investment Advisers Act of 1940. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains and financial penalties against all defendants.
Without admitting or denying the allegations in the complaint, Taglieri agreed to settle the SEC’s charges against him. He consented to the entry of a judgment, subject to approval by the court, enjoining him from violating future violations of the above provisions of the securities laws and providing for disgorgement of ill-gotten gains and financial penalties in amounts to be determined by the court at a later date.
Separately, the U.S. Attorney’s Office for the Southern District of Florida (USAO) today announced the unsealing of indictments against Bass, Alabre and Taglieri charging them with securities fraud, conspiracy to commit securities fraud, wire fraud and money laundering.
The Commission acknowledges the assistance and cooperation of the USAO and the Federal Bureau of Investigation in this matter.
# # #
For more information, contact:
Glenn S. Gordon
Associate Regional Director (Enforcement), SEC’s Miami Regional Office
Teresa J. Verges
Assistant Regional Director (Enforcement), SEC’s Miami Regional Office