MANHATTAN (CN) – Nearly 200 people claim in state court that a Colombian couple led a $100 million Ponzi scam – a complaint that mirrors ongoing federal litigation.
Rafael Torres Acero and 198 other plaintiffs sued FIT International Group Corp., Forex International Team Inc., and two individuals – Jairo Enrique Sanchez and Dilia Margarita Baez – in New York County Court. Most of the plaintiffs are Colombian; several are from Florida; others are from New York, Texas, North Carolina, Mexico, Italy, Israel, Panama and Peru.
Three plaintiffs filed a similar class actionin the Manhattan Federal Court in March 2010, claiming Sanchez and Baez ran off with money from 600 victims.
Since the couple never answered the original complaint, the case was eventually dismissed; it was refiledin February. This time, Sanchez and Baez received their summonses, according to the Federal Court docket.
This week nearly 200 people claiming to be their victims have filed a nearly identical complaint in state court.
According to both complaints, Sanchez’s and Baez’s last known address was an apartment in Bogota, and they used the name Forex International Team for their scam.
The FIT International Group was their main tool, though “No such company has ever been incorporated, as a corporation or limited liability company, in New York,” according to the latest complaint.
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.
Sanchez and Baez took more than $100 million from investors over “the course of several years,” but “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 pulled out, warned investors to withdraw their money, and redeemed the $2.2 million he had put into 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, and deflected “every single question” from creditors by pleading their Fifth Amendment right, according to the complaint.
The plaintiffs seek damages for fraud, racketeering and other charges.
Gaytri Kachroo, of Cambridge, Mass., represents plaintiffs in both the state and federal cases.