The Securities and Exchange Commission has charged a New York investment advisor with operating a multimillion-dollar investment club that was allegedly a Ponzi scheme that scammed members of the local Haitian community as well as his family and friends.
According to the SEC complaint, Ruless Pierre ran the Amongst Friends Investment Group, an investment club that was actually a swindle that raised more than $2 million from at least 100 investors who were predominately Haitian New Yorkers.
Filed in the US District Court for the Southern District of New York, the complaint charges Pierre with violating the antifraud provisions of the federal securities laws. It also names R. Pierre Consulting Group as a relief defendant, which means it is not accused of wrongdoing but received something illegally to which it has no legitimate claim.
Pierre allegedly lured investors by promising unrealistically high rates of return that ranged from 20% every 60 days to as high as 40% every 60 days. The SEC, however, said those returns were fabricated and that Pierre had in fact incurred heavy losses when trading in securities.
“We allege that Pierre’s Amongst Friends investment opportunity that targeted members of Pierre’s local Haitian community was built on a foundation of lies and deceit,” Marc Berger, director of the SEC’s New York Regional Office, said in a statement. “Investors should be wary of investments promising rates of return that seem too good to be true and are encouraged to ask questions and check on their investment professional’s background.”
The SEC said that Pierre’s trading resulted in losses of more than $300,000 in 2017, and nearly $1 million in 2018, and that he concealed the losses by using new investor funds to pay older investors. He created false account statements that showed investment gains, the SEC said. Pierre also allegedly helped finance the fraud by using money he embezzled from a former employer to make interest payments to investors.
According to the US Attorney’s Office, from November 2016 through February 2019, Pierre lost approximately $1.4 million through day trading. He also allegedly used investor funds to purchase luxury vehicles and a fast food franchise for himself.
The SEC’s complaint also alleges that Pierre fraudulently raised at least $375,000 from more than 15 investors related to a scheme involving the sale of partnership interests in a fast-food chain. As part of that scheme, Pierre allegedly falsely guaranteed monthly returns of 10%, plus quarterly profit sharing. The SEC said that Pierre knew that the franchise could not provide enough profits to pay investors the promised returns.
In a parallel action, the US Attorney’s Office filed criminal charges against Pierre. He is charged with one count of securities fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. He also faces one count of structuring, which carries a maximum sentence of five years in prison.
“Pierre used his ties to the Haitian community, his trusted reputation in that community, and convincing pitch to target and cheat hundreds of victims in an illegal investment Ponzi scheme,” Philip Bartlett, inspector-in-charge of the New York Field Division of the US Postal Inspection Service, said in a statement. “If an investment promises unusually high returns, it’s likely bogus. Don’t let greed override common sense.”