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Financial Crimes
09/28/2010

Miami jeweler pleads guilty to $40 million Ponzi scheme and $12 million bank fraud scheme

MIAMI - Luis Felipe Perez, 38, of Fort Lauderdale, Fla., pleaded guilty on Sept. 23 to securities fraud in connection with a $40 million Ponzi scheme following an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Office of Homeland Security Investigations (HSI). In a separate but related case, Perez also pleaded guilty to conspiracy to commit bank fraud in connection with a $12 million scheme.

In court, Perez admitted that from approximately 2006 through mid-2009, he solicited funds from approximately 35 individuals in exchange for promissory notes or oral loan agreements. He falsely informed investors that they would be investing in his jewelry businesses or in pawn shops located in New York City. In fact, however, only a small portion of investor money was used for Perez's jewelry businesses and none of the money was ever invested with any pawn shops.

According to the charges and documents filed in court, Perez also promised investors high returns from these investments of between 2 percent to 10 percent monthly, which would result in 24 percent to 120 percent paid annually. Perez created an unsustainable Ponzi scheme in which he used the monies collected from new investors to pay the returns promised to the earlier investors.

When prospective investors told Perez that they did not have money available to invest with him, he referred them to a certified public accountant named Berta Sanders, who is charged with conspiracy to commit bank fraud with Perez.

Sanders then prepared fraudulent loan applications on behalf of these investors, which were submitted to Wachovia Bank. These false loan applications contained false information about the borrower's business income, assets, and accounts receivable.

Sanders also prepared false tax returns, bank statements, and personal financial statements in connection with the line of credit applications. Once the borrowers received the proceeds from the fraudulent loan applications, they invested most of the funds in Perez's Ponzi-scheme. When Perez's Ponzi scheme ultimately collapsed in May 2009, most of the fraudulent loans obtained from Wachovia subsequently defaulted.

Most of Perez's investors never recovered their investments, while Perez made millions of dollars and lived an extravagant lifestyle that included a multi-million dollar home, expensive cars, and international travel. The loss created by Perez's participation in these fraudulent activities is approximately $37 million.

Sentencing has been scheduled for Dec. 2 before U.S. District Judge Paul C. Huck.