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‘Investment Club’ Operator Convicted of Running Ponzi Scheme

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What You Need to Know

  • The unregistered advisor was convicted of two counts of securities fraud, one count of wire fraud and one count of structuring.
  • He faces a maximum of 65 years in prison when sentenced on Sept. 9.
  • The SEC also filed a complaint against him over the same Ponzi scheme.

The operator of a New York “investment club” called Amongst Friends was convicted Thursday in Manhattan federal court of securities fraud, wire fraud and structuring charges for running multimillion-dollar Ponzi and embezzlement schemes, according to Audrey Strauss, the U.S. attorney for the Southern District of New York.

After a trial before Judge Sidney Stein, unregistered investment advisor Ruless Pierre, 51, of Nanuet, New York, was convicted of two counts of securities fraud, each carrying a maximum sentence of 20 years in prison; one count of wire fraud carrying a maximum sentence of 20 years in prison; and one count of structuring that carries a maximum sentence of five years in prison, Strauss said. Sentencing is scheduled for Sept. 9 at 2:30 p.m.

Geoffrey Berman, the former U.S. attorney for the Southern District of New York, filed an indictment against Pierre on Nov. 4, 2019. The Securities and Exchange Commission separately filed fraud charges against Pierre and his business, R. Pierre Consulting Group (RPCG), for the same schemes, saying in a complaint filed Nov. 6, 2019, also in U.S. District Court for the Southern District of New York, that the defendant’s investment scam targeted members of the local Haitian community.

In the course of the investment fraud scheme, Pierre fraudulently obtained more than $2 million from almost 100 investors, the SEC and Berman alleged. After receiving money from investors, Pierre allegedly deposited the money into one of his personal bank accounts or bank accounts of RPCG.  He then allegedly transferred the money to trading accounts, where he engaged in unprofitable day trading.

Despite his trading losses, Pierre repeatedly and falsely claimed to investors, including in investment statements containing fictitious balances, that his trading was profitable and their investments were growing as promised, the plaintiffs alleged.

In addition to losing their money, Pierre also allegedly used investors’ funds to cover personal expenses that included luxury vehicles.

“Today, Ruless Pierre was brought to justice for callously lying to investors,” Strauss said in a statement, adding: “Pierre told investors their investment returns were excellent, when in fact he failed to invest investor funds as promised, generated losses when he did invest, and diverted much of investor funds to his personal use and to repay investors in a Ponzi-like fashion.”

More Details

From at least November 2016 through October 2019, Pierre allegedly solicited money from investors by falsely promising them he would earn a 20% return on their initial investment every 60 days via stock trading.

The investments were memorialized in “Investment Promissory Notes.” After receiving money from investors and depositing them into his and RPCG’s bank accounts, he allegedly then transferred the money to trading accounts, where he engaged in unprofitable day trading.

In another of the schemes for which he was convicted, Pierre allegedly embezzled money from his former employers: a hotel in Palisades, New York, and another in Armonk, New York.

(Image: Shutterstock)