Home Banking & Finance SEC and prosecutor say Haitian investment scheme was $2M fraud

SEC and prosecutor say Haitian investment scheme was $2M fraud

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A Rockland County man has been accused of exploiting his ties to the Haitian community to steal more than $2 million from a hundred investors.

Ruless Pierre, 50, of Nanuet, was arrested Nov. 5 and charged by the U.S. Attorney’s Office with securities fraud, wire fraud and structuring transactions to evade reporting requirements.

SEC securities fraud HaitianThe U.S. Securities and Exchange Commission filed a separate civil suit in federal court in  Manhattan accusing Pierre of violating securities laws.

“Pierre fraudulently obtained millions of dollars from investors (by) promising impossibly high returns from securities trading,” the SEC complaint states.

He used some of the money to buy a BMW, a Range Rover, a car service business and a fast food franchise, according to the criminal indictment.

A court record in an unrelated Rockland County lawsuit links Pierre to Planet Wings Orangeburg, a fast food franchise in the Orangetown Shopping Center, and to Joy Ride Auto Group in Nanuet.

The SEC complaint also names R. Pierre Consulting Group LLC (RPCG) as a defendant. Both actions accuse Pierre of wrongdoing in his work as director of finance for an undisclosed conference center in Palisades and a hotel in Armonk.

Pierre formed an informal investment club in 2016, according to the SEC, with his brothers, a sister and a few friends. Each member contributed about $2,500 and they researched stocks to buy.

He formalized it in 2017 as the Amongst Friends Investment Group, according to the SEC, and he alone ran it.

Amongst Friends was to invest in stocks, other securities, digital currencies and commercial and residential rental property.

Pierre issued “investment promissory notes” that offered exceptionally high rates of return  of 20% to 40% interest every 60 days, according to the SEC.

He raised more than $2 million from about 100 people, mostly Haitian New Yorkers.

Funds were deposited in bank accounts under the RPCG name, commingled with his own money and transferred to trading accounts where, according to the indictment, “he engaged in unprofitable day trading.”

Pierre lost more than $1.4 million, the SEC said, and he already knew in 2017 that the promised rate of return was unsustainable. Yet, he continued to issue notes promising the same returns.

He also dissuaded investors from redeeming their money by offering to reinvest their interest. One investor, according to the indictment, was given a spreadsheet that projected $59,000 growing to nearly $1.1 million by September 2021.

Investors who demanded payouts were given money from new investors, the indictment states, “in Ponzi-like fashion.”

He also embezzled more than $400,000 from the hotels he worked for, according to the indictment, and used some of that money to pay back investors, according to the SEC.

In another alleged scheme, 19 investors paid $375,000 for “silent partnership agreements” in three fast food franchises that Pierre was supposed to buy. The deals promised a 5% monthly return and 40% pro rata share of the franchises’ gross operating profits.

Pierre bought one franchise for $50,000, in Orangeburg, this past May. The SEC sayid financial statements for 2015 to 2016 show that franchise profits were only $3,662 to $30,823 a year.

The indictment also accuses Pierre of depositing at least $567,372 in two bank accounts in amounts of less than $10,000 per deposit, to evade reporting requirements.

The SEC is asking the court to order Pierre to give up his ill-gotten gains and pay penalties. The alleged criminal violations carry maximum prison sentences ranging from five to 20 years.

U.S. Attorney Geoffrey S. Berman praised the work of investigators from Homeland Security, U.S. Postal Inspection Service, Internal Revenue Service, New York City police and New York City sheriff’s office.

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