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November 12, 2019 at 02:55 PM
(Photo: Thinkstock)
The Securities and Exchange Commission filed fraud charges against investment advisor Ruless Pierre of Nanuet, New York, and his R. Pierre Consulting Group for operating a multimillion-dollar investment club that the SEC said was actually a Ponzi scheme targeting members of the local Haitian community.
In or about 2016, Pierre formed an informal investment club in which he, his brothers, sister and a few friends each contributed about $2,500 in an effort to generate passive income, according to the SEC’s complaint, filed Wednesday in the U.S. District Court for the Southern District of New York.
Initially, club members suggested specific stocks they had researched and the group decided which stocks to buy, the complaint said. Starting in or about 2017, Pierre formalized the investment club, called it Amongst Friends, and expanded it beyond the initial family and friends, according to the SEC, which noted that, by that point, members were relying “solely on” Pierre’s investment choices.
Pierre started issuing notes to investors using the Amongst Friends name and, although terms of those notes varied, they were similar in a few key aspects, according to the SEC.
First the notes each contained “exceptionally high rates of return, from 20% interest every 60 days to as high as 40% interest every 60 days,” the complaint said. The notes also lacked maturity dates, instead indicating they were to be repaid “upon dissolution” or within 30 days of the investor’s “request to exit the group,” and they all also stated the purpose of the investment group was to invest the assets of the group in stocks, other securities, digital currencies, and commercial and residential rental property, according to the complaint.
