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Friday, July 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

$100 Million Ponzi Alleged; Leaders Vanish

MANHATTAN (CN) - A Colombian couple took $100 million from hundreds of investors in a Ponzi scam through their Florida-based company, FIT International Group, and when they were nailed for it, claimed to be distributing their remaining $12,690.74 "for the 'benefit' of creditors," a RICO class action claims in Federal Court.

Jairo Enrique Sanchez and Dilia Margarita Baez, whose last known addresses are the same apartment in Bogota, also used the name Forex International Team for their scam, according to the class, which is estimated at 600 victims.

The FIT International Group was the main tool for their predations, though "No such company has ever been incorporated, as a corporation or limited liability company, in New York, however," the investors say.

Foreign exchange markets trade roughly $3 trillion a day, making it one of the largest markets in the world, according to the complaint. It's fertile ground for Ponzi schemes.

"Because there are no daily limits on trading or the hours for trades, except weekends, there is nearly always an opportunity to react to moves in the main currency markets and a low risk of being caught in an investment without an opportunity to exit," the complaint states.

Sanchez and Baez solicited clients through "social connections," particularly a dentist in Columbia named Mauricio Vasquez Uribe, the complaint states. Uribe is not a party to this action.

After taking more than $100 million from investors over "the course of several years," Sanchez and Baez "never invested the money in Forex trading as they had promised, but merely siphoned it away to secret private accounts at HSBC, UBS, and others," the complaint states.

As the scheme unraveled in December 2008, the dentist Uribe quickly pulled out, warned investors to withdraw their money, and promptly redeemed the $2.2 billion he added to the enterprise, the complaint states.

Then in March 2009, Sanchez and Baez manufactured "catastrophic losses of purportedly as much as 70 percent to 80 percent to investor accounts," though they never had invested the money to begin with, the class claims. Then they fraudulently filed for bankruptcy in Florida deflected "every single question" from creditors by pleading their Fifth Amendment right, according to the complaint.

The class seeks damages for fraud, racketeering and other charges. It is represented by Gaytri Kachroo of Kachroo Legal Services in Cambridge, Mass.

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