Providence Financial Investments Seeking Claw Back in $64M Fraud Case
A Florida-based investment firm that raised more than $64 million from 400 investors is seeking to claw back more than $3 million from one of the firm’s originators who lured investors into a scam.
Trustee Suit Hopes to Claw Back $3M
Maria Yip, the trustee for Miami’s Providence Financial Investments Inc. and its affiliate Providence Fixed Income Fund LLC, filed suit against John Abio. Yip claims that Abio was internally known as the “sales star” and was the highest paid originator at the company. After reviewing the company’s books, Yip learned that Abio received more than $3 million in commissions between March 2012 and April 2016. Yip hopes to claw back some of the money given to Abio.
Providence Financials Also Faces SEC Suit
The SEC sued Providence Financial and Providence Fixed Income Fund last June, alleging they told investors that their money would be used to fund investments in receivables transactions in Brazil. In reality, only about 2/3 of investors’ money went toward that purpose. The rest of the money was directed toward what the SEC labeled as “generous” 6 percent commissions to unregistered brokers and millions more to insiders.
In July 2016, just weeks after the SEC shut down the firm’s operations in Minnesota, Providence filed for Chapter 7 bankruptcy protection. The firm listed less than $50,000 in assets and liabilities of between $1 and $10 million.
According to the SEC suit, Providence also hid its financial difficulties from investors and claimed its notes were low-risk. Combined with a very unfavorable exchange rate, the SEC claimed the company is having trouble accounting for how much of investor proceeds were actually spent.
Did you Invest with Providence Financial Investments?
If you invested with Providence Financial Investments Inc. or Providence Fixed Income Fund LLC, you may have certain legal rights that require your immediate attention.
Call an Investment Fraud Attorney Today
If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerages firms for their wrongful actions. With offices in Los Angeles, New York, West Palm Beach and Miami, our class action attorneys represent clients nationwide and can help you recover your investment.
Contact an attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.