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Thursday, Mar 28, 2024
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Regulators Charge Investment Fund Operators With Fraud

The Securities and Exchange Commission charged two San Diego men and a Mexican national, along with the four businesses they controlled, with securities fraud and operating a Ponzi scheme that collected investor funds by promising excessive returns, and using money collected from later investors to pay off earlier investors.

The focus of the SEC complaint filed July 28 is a group of investment funds: Diversity Capital Investments, based in Chula Vista; a Mexican affiliate of Diversity; Strong Capital Investments, based in Chula Vista; and the Optimus Fund, based in San Diego.

According to the complaint, Damian Meneses, 37, of Mexico, as well as Chula Vista residents Edward Ferguson, 37, and Joel Ley, 31, operated the funds that collected about $14 million from investors in the United States and Mexico by promising returns ranging from 3 percent to 8.25 percent a month from investments in currency trading.

The SEC charged two others as relief defendants in the case: Juan Galindo Flores, 48, and Socorro Terlizzi, 41, who is believed to be Meneses’ wife. Both are from San Diego.

Rosalind Tyson, regional director of the SEC in Los Angeles, said, “As alleged in the complaint, investors were guaranteed extraordinarily high returns from a foreign currency trading program that never actually existed.”

According to the SEC, the Diversity Capital Web site claims that it is one of the largest private funds in the market and manages more than $1.7 billion. The complaint also alleges that defendants encouraged investors to refinance their homes and use the proceeds to invest in the funds.

The SEC said investors in Diversity Capital were notified in October that their accounts would be frozen for at least six months because of the worldwide economic crisis and the devaluation of the euro. Strong Capital sent out a similar message to its investors in November.

Diversity Capital may be still accepting investor funds through an offshore wire transfer platform registered in the British Virgin Islands, Cayman Islands and Nevis, the complaint states.

The SEC order freezes the assets of Diversity Capital, its Mexican affiliate, Strong Capital, Optimus Fund and the assets of the three defendants and two relief defendants. It also seeks permanent injunctions, disgorgement of ill-gotten gains and civil penalties.

, Mike Allen

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