SEC Files Complaint Against Miami Real Estate Ponzi Scheme

The Securities and Exchange Commission (SEC) has charged a prominent Miami couple, Gaston Cantens, 71, and his wife Teresita Cantens, 73, with operating a $135 million Ponzi scheme through a real estate investment scam. The scheme reportedly defrauded hundreds of people, mostly elderly Cuban-Americans.

Much as with Bernie Madoff's Ponzi scheme, the "promised returns" should have set off red flags. The SEC said that the couple's Royal West Properties promised returns between 9 and 16 percent.

As the mortgage crisis hit and continued, however, the Cantens used money from new investors to fund older investors. That is a classic Ponzi scheme, and is the same method used by Madoff.

According to Eric Bustillo, regional director of the SEC's Miami office, the couple also took $20 million of funds to pay themselves salaries, to fund other business ventures and to pay their children and grandchildren "consulting fees" despite the fact they did no work. He added,

"The Cantens used their prominent standing in a close-knit Cuban-American community to ruthlessly exploit vulnerable elderly investors who trusted them with their life savings."

According to its site, Royal West Properties filed for bankruptcy protection in August of 2009. Royal West had offices in Florida, New York, Colombia, Ecuador, Peru and Venezuela and also sold investments through infomercials in Texas, New Jersey and California.

Several Royal West investors have also filed lawsuits on the federal level, against Cantens and his wife Teresita.

Written by Michael Santo
HULIQ.com

Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.