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Ponzi Scheme Involving $40 Mill Leaves South Florida Man Facing Charge

A South Florida man has been charged in a Ponzi scheme after taking $40 million from unsuspecting investors. On Wednesday, June 2, 2010, federal authorities charged 38-year-old Luis Felipe Perez in connection with the scam.

According to federal authorities and documents filed with the U.S. Securities and Exchange Commission, Perez allegedly swindled $40 million from about 35 people, including personal connections and family members. The scheme supposedly lasted from 2006 to the middle of 2009. Perez has been charged with six counts of securities fraud.

Investors were told that the money would be used to invest in his jewelry business and/or New York pawn shops. He allegedly even used fake diamonds to convince some of the investors. Investors were also under the impression that their investments would be secured with diamonds that he had stored in safe deposit boxes.

However, prosecutors claim that Perez used money from new investors to pay back some of the older investors. Investors were promised annual returns of 18 percent to 120 percent through monthly interest payments.

During the scheme, Perez apparently gifted approximately $1 million to family members, as well as spent $300,000 traveling via private jet. He has also been accused of spending $400,000 on costs associated with leasing exotic cars. Perez even made $100,000 in political contributions.

According to U.S. Attorney’s Office spokesperson Alicia Valle, Perez is not in custody. However, he is expected to appear before a federal magistrate judge in the near future.