South Florida financiers charged in alleged
investment scam that defrauded Latin Americans |
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March 29, 2005 – Two South Florida financiers, who enticed thousands of Latin Americans to invest $127 million in funds with patriotic names like ''Liberty Trust,'' were charged Tuesday by the Securities and Exchange Commission with running a ''sham'' program to enrich themselves. Outlining a major case of alleged international fraud, the SEC charged that Miami financial executives Luis M. Cornide and Robert de la Riva, directors of the Pension Fund of America, misrepresented fees and costs to investors, handed out some vital investment information in English only and forged documents to gain the trust of targeted victims in Central and South America. ''The defendants have failed to disclose to investors that their entire investment program is a sham designed to enrich themselves and their agents,'' the SEC complaint charged. District Judge K. Michael Moore, responding to the SEC complaint, froze bank accounts and other assets belonging to Cornide and de la Riva, issued restraining orders and appointed a receiver for a string of their companies incorporated in Florida and the Cayman Islands. The attorney representing Cornide and de la Riva did not immediately return a message left at his office. The pitch to investors for the variable annuities that included pension plans and life insurance seemed red, white and blue. Besides naming the company, Pension Fund of America, the two funds were called Liberty Trust or Capital Trust. They were told that huge banks or brokers such as HSBC or Raymond James, were custodians of their money or partners, which was untrue, the complaint said. The two men never disclosed that as much as 90 percent of their funds - or in one case, the entire investment, were eaten up by commissions for more than 500 sales agents in Central and South America, or for fees and other costs, according to the complaint. The complaint also alleges that Cornide and de la Riva misappropriated more than $15 million for themselves. None of the ''outrageous commissions, fees and costs'' were disclosed to the investors, the complaint charges. To make sure that investors had no idea of the fees they were being charged, their annual statements only showed the initial investment and not the total after charges were tacked on.
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