Two Investment Advisors Charged With Securities Fraud In Connection With Sales of Unit Investment Trusts
Thursday, August 4, 2016
Two investment advisors are charged with conspiring to commit securities fraud in connection with a multi-million dollar scheme to sell unit investment trusts.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
David Garcia Villasana, 48, and Yul L. Pinto, 41, both of Miami, are charged by criminal information with one count of conspiracy to commit securities fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff(a) and Title 17, Code of Federal Regulations, Section 240.10b-5. Villasana and Pinto face a maximum statutory sentence of five years in prison and a fine up to $250,000. The case is assigned to U.S. District Judge James I. Cohn in Ft. Lauderdale.
According to court documents, including the information, Villasana and Pinto operated Great Financial Consultants L.C. (“Great Financial”) and York Kingdom International, Inc., in the Brickell area of Miami. Villasana and Pinto, who previously had worked as investment advisors in Venezulea, solicited wealthy investors throughout the United States that had ties to Venezuela. Villasana and Pinto created investment offering documents entitled “Global Capital Builder,” among other references, to make it appear that investments with York Kingdom and Great Financial had a track record of producing high rates of return. During telephone conversations, Villasana and Pinto promised investors safety and security of the investments, by claiming that the profits could be withdrawn at any time and that the submitted monies would be placed into specific investments or categories of investments. The pitch to investors included false representations that investors’ monies would be invested in a diversified portfolio of stocks and bonds in a manner that tracked other, well known investment trusts. Villasana and Pinto also falsely represented to investors that York Kingdom and Great Financial operated as affiliates of European-based investment companies.
The court documents further allege that upon receipt of investor monies, Villasana and Pinto did not invest the funds as promised. Instead, Villasana and Pinto used more than $2.2 million of investor funds to purchase goods and services for themselves, including a Bentley and several BMW automobiles.
According to court documents, Villasana and Pinto would transmit to investors periodic “Unit Allocation Statements” that represented that the investors’ funds had appreciated in value, and to purportedly show that the investors held a certain number of “units” in specific investment trusts, or mutual funds. In reality, the information on these statements was fabricated by Villasana and Pinto, as the investors’ money was never placed in any such investments. When investors contacted York Kingdom and Great Financial and attempted to cash in on their investments, Villasana and Pinto provided a series of false explanations about the status of their monies and alleged that return payments would be forthcoming. Toward the end of the scheme, Villasana and Pinto failed to respond to investor requests to cash in on their investments or have their money returned.
Mr. Ferrer commended the investigative efforts of the FBI. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Allison Lehr.
A criminal information is merely an allegation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.