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Financial Crimes
12/02/2010

Miami jeweler sentenced to 10 years for Ponzi and bank fraud schemes

MIAMI - Luis Felipe Perez, 38, of Fort Lauderdale, Fla., was sentenced to prison earlier today, following an investigation led by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI).

United States District Judge Paul C. Huck sentenced Perez to 10 years in prison for securities fraud in connection with a $40 million Ponzi scheme and five years in prison in connection with a $12 million bank fraud scheme. The sentences will run concurrently and will be followed by three years supervised release, which includes one-year of home confinement. Additionally, Judge Huck ordered Perez to pay restitution in the amount of approximately $10 million.

From approximately 2006 through mid-2009, Perez solicited funds from approximately 35 individuals in exchange for promissory notes or oral loan agreements. Perez falsely informed investors that they would be investing in his jewelry businesses or in pawn shops that were 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, Perez also promised investors high returns from these investments of between 2% to 10% monthly, which would result in 24% to 120% 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 pleaded guilty on Oct. 28 to conspiracy to commit bank fraud with Perez.

Once Perez referred the investors to Sanders, she prepared fraudulent loan applications, which were submitted to Wachovia Bank on their behalf. 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. Sanders received a fee of approximately 10% of the loan amount in exchange for her services and paid a portion of these fees to Richard Garcia, a Wachovia loan officer, as compensation for his assistance in preparing and processing the fraudulent applications. Garcia pleaded guilty to bank fraud conspiracy on Nov. 1.

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 as well.

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.

The investigation was conducted by ICE HSI in Miami, the City of Miami Police Department and the U.S. Secret Service.

The case is being prosecuted by Assistant U.S. Attorneys Andrew K. Levi and Richard Gregorie.