SEC charges $15 million Ponzi scheme targeting Mexican-American community
Armando Gutierrez Rosas purportedly intended to invest these funds in U.S. real estate and mining operations in Mexico, assuring investors of monthly returns as high as 10 percent. Instead, Gutierrez operated a Ponzi scheme, diverting investor funds to cover his personal expenses, which notably included the acquisition of a $2.5 million mansion in Texas.
The Securities and Exchange Commission (SEC) has initiated legal proceedings against Aras Investment Business Group S.A.P.I. de C.V., its CEO Armando Gutierrez Rosas, and four other individuals for orchestrating a fraudulent scheme that raised at least $15 million from more than 450 retail investors in the United States.
Most of these investors were members of the Mexican-American community. The SEC’s complaint alleges that the defendants engaged in a Ponzi scheme and affinity fraud, misleading investors with promises of substantial monthly returns.
Instead of delivering returns of 10% to investors, Gutierrez bought a mansion in Texas
The SEC’s complaint, filed in the U.S. District Court for the Western District of Texas, contends that Gutierrez fraudulently solicited funds from U.S. retail investors between March 2020 and November 2021. He purportedly intended to invest these funds in U.S. real estate and mining operations in Mexico, assuring investors of monthly returns as high as 10 percent. However, according to the complaint, none of the U.S. investor funds were employed for their intended investment purposes. Instead, Gutierrez operated a Ponzi scheme, diverting investor funds to cover his personal expenses, which notably included the acquisition of a $2.5 million mansion in Texas.
Apart from Gutierrez, the SEC has also charged Efren Quiroz, Luis Quiroz, Maria Tolentino, and Diayanira Rendon for their involvement in the alleged fraudulent activities.
Melissa R. Hodgman, Associate Director in the SEC’s Division of Enforcement, expressed the SEC’s commitment to holding promoters of affinity frauds accountable, stating, “Our investigation uncovered this egregious fraud that cost the investors involved more than $6 million.”
The SEC’s complaint brings various charges against the accused parties. Gutierrez and Aras are charged with violating the antifraud and registration provisions of federal securities laws.
Efren and Luis Quiroz are charged with acting as unregistered brokers, while Tolentino, along with Efren and Luis Quiroz, faces charges for violating the registration provisions and aiding and abetting Gutierrez’s and Aras’s violations of antifraud provisions.
Rendon is charged with aiding and abetting Gutierrez’s and Aras’s violations of antifraud provisions.
Efren and Luis Quiroz, Tolentino, and Rendon have consented to the entry of judgments against them, neither admitting nor denying the allegations in the complaint.
These settlements include full injunctive relief against future violations, with disgorgement and penalties to be determined by the court following a Commission motion. Additionally, Efren and Luis Quiroz have consented to settled Commission orders that prohibit their association with registered entities and participation in penny stock offerings.
