The Securities and Exchange Commission (SEC) on Tuesday charged Puerto Rico businessman Ricardo Bonilla Rojas and his firm, Shadai Yire, of operating a Ponzi scheme aimed at evangelical Christians and factory workers.
According to the SEC, Rojas and his firm raised a minimum of $7 million from about 200 investors. The majority of the investors reside in Puerto Rico, Florida, New York and North Carolina.
“Rojas targeted novice investors who were often evangelical Christians, and he touted a long history of successful trading in commodities,” Director of the SEC’s Miami Regional Office Eric I. Bustillo said in a statement. “In reality, he was fleecing the flock.”
Rojas told investors that their principal contributions were “100% guaranteed.” He also said their money would be invested in commodities and he promised returns up to 50%.
That money was never invested.
What Rojas didn’t tell the investors was that he used $700,000 of that money to support his own life-style.
In what the SEC refers to as “classic Ponzi scheme fashion,” Rojas used money from new investors to repay earlier investors.
The scheme took place from at least August 2005 until February 2009, the SEC says.
The SEC also believes that Rojas did not work alone. He allegedly hired sales agents to help him sell his scheme to novice investors. Those agents were then paid commissions based on a percentage of the funds they raised.
A $7 million fraud may look tiny in comparison to the recent $600 million Ponzi scheme conducted by Zeekler.com, but it’s definitely not small potatoes to the victims involved. The SEC seeks various punitive measures against Rojas and Shadai Yire.