The SEC says it has charged a former broker and investment advisor, along with his company, for running a multi-million-dollar Ponzi-like scheme with victims that included first responders.
Victor Lee Farias and his company, Integrity Aviation & Leasing, allegedly raised $14 million from investors purportedly for the purchase of aircraft parts for leasing to airlines, according to a litigation release from the regulator. Farias allegedly touted his own investment experience and IAL’s competitive advantages, including an algorithm for identifying lucrative leasing opportunities, the SEC says.
But IAL allegedly only spent a small portion of the funds raised from the investors on aircraft parts, according to the litigation release. Instead, Farias and his company allegedly made $6.5 million in Ponzi-like payments to investors and invested $2.7 million in a friend’s business, with Farias also allegedly misappropriating $2.4 million for personal expenses, the SEC says.
Farias then allegedly used the SEC’s letterhead from the regulator’s investigation of his activities to show purported proof that he was working with the SEC to take IAL public, according to the litigation release.
The investors in many cases were retirees, including retired San Antonio, Texas, police officers and other first responders, many of whom withdrew their retirement savings and deposited them in new self-directed IRA accounts, the SEC says.
The regulator is seeking injunctive relief, disgorgement plus prejudgment interest and civil penalties, according to the litigation release.
Farias became a registered representative in 1998 and an investment advisor in 2005, according to BrokerCheck and the SEC’s Investment Advisor Public Disclosure database. He was registered with Capital Guardian for most of 2011, then with Further Lane Securities from October 2011 to May 2012, and then again with Capital Guardian from 2012 to 2013, according to his BrokerCheck record. He has not registered with another firm since then.
Finra, meanwhile, expelled both Capital Guardian and Further Lane in January 2018, according to BrokerCheck.
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