Texas Man Scammed Retired Cops In $14M Ponzi Scheme
The U.S. Securities and Exchange Commission (SEC) accused Victor Lee Farias of deceiving investors out of approximately $14M in a purported aviation parts leasing ponzi scheme — most of the victims are retired San Antonio police officers.
Scammer Promised High Returns, Delivered No Results
Mr. Farias and his company Integrity Aviation & Leasing LLC supposedly collected investments from roughly 88 individuals to lease and buy aircraft engines and other assets.
According to the SEC, Mr. Farias and IAL’s salespeople “focused significant sales efforts on retired San Antonio police officers and other first responders,” promising them (and other prospective clients) 10-12% returns. However, instead of investing the money as agreed, Mr. Farias purportedly spent millions of dollars on personal expenses and investments, while making Ponzi-like payments to other investors.
Based on the SEC’s information, roughly $6.5M was distributed back to other investors as Ponzi-like payments, and $2.7 million were spent in a friend’s gas station and convenience store of Farias. Another $1M was used to pay IAL’s sales agents, and finally, $2.4M went towards Farias’ expenses (including golf and country club bills.)
IAL Sold Non-SEC Recorded Promissory Notes
Based on the reports, Mr. Farias founded his company in August 2013. And starting that year through January 2019, the company sold promissory notes that were not recorded with the SEC.
In 2015, the IAL developed private placement documents that detailed an aviation asset business and explained how investors’ money would be used. The documents even included a brochure with images of warehouses full of airplane parts. They claimed it was presumed to generate gross revenue above $15M per year with an asset value above $35M.
However, according to the authorities, the company only ever purchased airplane parts with a fraction of the investor revenue and mostly used investor funds for other purposes.
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Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to Ponzi schemes. The firm has successfully represented numerous securities fraud victims who have lost money as a result of Ponzi schemes and we will aggressively pursue claims to recover your losses.
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