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Tuesday, June 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Second Try in Alleged|$100 Million Ponzi

MANHATTAN (CN) - Investors in an alleged $100 million Ponzi scheme will try again to serve a Columbian couple with a federal RICO class action that accuses them of running off with money from 600 victims.

Plaintiffs Manuel Bolivar, Andres Rubio and Janneth Quintero filed a nearly identical class action in March 2010, which a federal judge dismissed last August for failure to prosecute.

Neither of the defendants - Jairo Enrique Sanchez and Dilia Margarita Baez - answered the original complaint, U.S. District Judge Paul Gardephe wrote in his order of dismissal.

The investors claim that when the Ponzi scheme was discovered, the defendants claimed to be distributing their remaining $12,690.74 "for the 'benefit' of creditors."

According to both lawsuits, the couple'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 the main tool for their predations, though "No such company has ever been incorporated, as a corporation or limited liability company, in New York," 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.

Though they took 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 pulled out, warned investors to withdraw their money, and redeemed the $2.2 million 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, and 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 Cambridge, Mass.

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