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Thursday, July 18, 2024 | Back issues
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Prison Guard Claimed Buffett as ‘Chairman” of Investment Firm, Wired Money to Phillipines

LOS ANGELES (CN) - A California prison guard has collected hundreds of thousands of dollars from investors through a securities fraud where he claimed his real estate company had Warren Buffett as its "Honorary Chairman," says the Securities and Exchange Commission in Federal Court.

Ottoniel Medrano, a prison guard at California City Correctional Center, and his partner, Leticia Isabel Medrano, allegedly represented to investors that their company International Realty Holdings had close ties with Berkshire Hathaway and Warren Buffett. Neither Buffett nor his company have ever done business with the defendants, according in the SEC's complaint.

The complaint, filed in federal court in Los Angeles on Monday, further alleges that the Medranos misrepresented to investors that fifty percent of IRH was owned by Credit Suisse, an international financial services group. The Medranos supported their claims by lifting photos and information from both Berkshire Hathaway's and Credit Suisse's websites and providing the material to investors, says the SEC.

According to the SEC, the Medranos intended to raise up to $6 billion by selling preferred stock in IRH. The Medranos also falsely claimed that IRH owned at least fifteen properties throughout Asia when the properties were actually owned by a company listed on the Singapore Stock Exchange that has never been associated with IRH.

According to the complaint, of $700,000 deposited into IRH's accounts as of February 2009, at least $500,000 has been wired by the Medranos into accounts held by a law firm in the Philippines.

The federal court in Los Angeles issued an emergency order halting the scheme. The complaint alleges violations of antifraud and registration provisions of securities laws.

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