SEC Wins Fraud Trial Against Miami-Based Investment Companies and Their Owners
FOR IMMEDIATE RELEASE
Washington, D.C., Oct. 1, 2010 — The Securities and Exchange Commission announced today that a federal judge has ruled in the SEC's favor in a trial against two Miami-based companies and three owners charged with fraudulently siphoning investor money through exorbitant, undisclosed commissions and fees in the sale of mutual funds.
U.S. Pension Trust Corp. and U.S. College Trust Corp. have been ordered by the Honorable Jose Martinez of the Southern District of Florida to pay more than $112 million. The three individuals running the companies — Iliana Maceiras, Leonardo Maceiras Jr., and Nildo Verdeja — have been ordered to pay more than $3.36 million combined.
The SEC charged the entities and individuals in September 2007 for defrauding approximately 14,000 investors in a 13-year scheme.
"Under the federal securities laws, investors are entitled to full disclosure so they know how much of their investment is going toward commissions and fees. The outcome of this case makes that point loud and clear," said Eric I. Bustillo, Director of the SEC's Miami Regional Office. "We will continue to aggressively pursue those who take investors' money and fail to give a full picture of how they are using those funds."
According to the court's findings, U.S. Pension Trust and U.S. College Trust solicited investments from mostly foreign investors in various multi-year investment plans starting in 1995. The plans put funds into a combination of U.S. mutual funds and insurance products. The court found that both in written materials provided to investors and in conversations that sales agents had with investors, the companies intentionally omitted disclosing numerous commissions and fees, including up to 85 percent of first-year contributions in some plans.
The court found that the companies and the individuals misrepresented to investors that their products were registered and regulated by the SEC, the Federal Reserve Bank, and the Office of the Comptroller of the Currency. The court also found that the defendants acted as broker-dealers in selling their products, without registering with the SEC.
The two companies were ordered to disgorge $62.6 million and pay a $50 million penalty. Each individual has been ordered to pay a $200,000 penalty in addition to disgorgement of their salaries during that time. Iliana Maceiras must disgorge $1,093,364. Leonardo Maceiras, Jr. must disgorge $674,567. Nildo Verdeja must disgorge $993,515.
In addition to the disgorgement and penalties, the court entered permanent injunctions against both companies and all three individuals against future violations of the securities laws.
In a related case, the same court entered a final judgment on Sept. 21, 2010 against Regions Bank — which served as trustee of U.S. Pension Trust and U.S. College Trust's plans from 2001 until 2009 — for its role in the offering fraud. The final judgment enjoined Regions Bank from violating the anti-fraud provisions of the federal securities laws and aiding and abetting violations of the broker-dealer registration provisions of the securities laws. Regions agreed to settle the charges without admitting or denying the allegations by consenting to the entry of the final judgment requiring payment of a $1 million penalty into a Fair Fund for the benefit of investors injured in U.S. Pension Trust and U.S. College Trust's offering fraud.
The SEC's case was litigated by senior trial counsels Amie Riggle Berlin and Scott Masel with the support of paralegal Patricia Soto and senior regional accountant Fernando Torres, who all work in the agency's Miami Regional Office.
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For more information concerning this enforcement action, contact:
Eric I. Bustillo
Director, SEC Miami Regional Office