Florida Executive Pleads Guilty to Orchestrating $150 Million Investment Fraud Scheme
On April 19th, 2018, the United States Department of Justice (DOJ) announced that Antonio Carlos de Godoy Buzaneli, an executive from Coral Gables, Florida, has pleaded guilty to investment fraud charges related to his role in a $150 million investment fraud scheme.
According to court documents, Mr. Buzaneli and several co-conspirators carried out the fraud scheme that victimized hundreds of individual investors in Florida and around the globe. Sadly, many of these investors were elderly or otherwise vulnerable and lost large portions of their hard-earned retirement savings.
Providence Financial Investments: A Miami-Based Company
In order to lure investors into the scheme, Mr. Buzaneli and his co-conspirators operated a Miami-based company called Providence Financial Investments. Investors were told that this company would be able to generate high rates of return on capital by purchasing ‘accounts receivable’ that were being held in Brazil. In addition to Providence Financial, the schemers also used several other related holding companies to execute the fraud scheme, including Providence Holdings International and Providence Fixed Income, LLC.
False Promises Were Made to Investors
In its marketing materials, Providence Financial informed actual and prospective investors that their business model was based on purchasing accounts receivable in Brazil, and that they would be able to make a strong return on investment through a process called ‘factoring’. In fact, investors were explicitly informed that they could expect to make a 48 percent annual return on their principal investment. As a marketing ploy, the tactics used by Providence Financial were effective. The company took in at least $150 million from investors, including more than $60 million from investors who were located in the United States.
The Company Operated Like a Ponzi Scheme
As an investment model, Providence Financial was making wholly illegitimate promises. In fact, Providence Financial shared many common characteristics of a typical Ponzi scheme. Not only was their purported investment strategy highly suspect, but Providence Financial did not even carry out this strategy. Instead of investing most of the investor money in Brazilian accounts receivable as was promised, the managers of the firm diverted a huge percentage of the funds. Without making proper disclosure, much of the money was used to pay huge commissions to a network of brokers who were attempting to get more people into the scheme. In addition, much of the money was siphoned off for personal use by the executives. Out of the $64 million put into the scheme by American investors, the DOJ estimates that only $14 million ever made it into Brazil, its intended location.
Contact Our Miami Investment Fraud Lawyers Now
At Carlson & Associates, P.A., we are proud to be strong advocates for investors in South Florida. If you or a family member lost a substantial amount of money because of investment fraud, please call us today at 1-(305)-372-9700 to set up a fully private evaluation of your legal claim. We are prepared to review your case and explain all of your available legal options to you.
Resource:
justice.gov/usao-mn/pr/florida-executive-pleads-guilty-orchestrating-150-million-brazilian-factoring-scheme
