Daniel and Matthew Rivera Charged for Running a Ponzi Scheme Directed at Seniors
On March 24, 2016, the Securities and Exchange Commission charged two brothers, and a company that they founded purportedly to develop and sell real estate, with engaging in a $2.7 million Ponzi scheme that targeted approximately 30, largely elderly and unsophisticated investors over a six-year period.
According to the SEC’s complaint, filed in federal court in New Jersey:
- From 2008 through at least 2014, Daniel Rivera, a New York resident who maintains an office in New Jersey, told investors that they would share in the profits of Robbins Lane, a Pennsylvania real estate venture that purportedly bought, redeveloped and sold properties.
- Daniel Rivera provided a brochure to investors that advertised Robbins Lane as “provid[ing] an opportunity for the senior investor to share in the profits from prudent investments in real estate” and “giv[ing] the senior investor a guaranteed monthly income.”
- In fact Robbins Lane had no real estate portfolio, no operations, no employees, and no ability to provide income to investors (much less “guaranteed” income).
- Daniel Rivera also created the content of a publicly available Robbins Lane website that aimed to attract investors and which his brother, Matthew Rivera, a Pennsylvania resident, reviewed. Robbins Lane’s website contained the same misstatements as did the brochure that was provided to investors.
- At times, Daniel Rivera recommended that investors liquidate other holdings, including retirement assets, to invest in Robbins Lane.
- Instead of investing in real estate, hundreds of thousands of dollars of investor funds were used to pay other investors.
- Other funds were used for personal expenses, such as, for example, to purchase tickets for sporting events, to pay for college tuition and sorority dues for Daniel Rivera’s daughter, to pay personal credit card bills, for transfers to relief defendants Rivera & Associates and Daniel Rivera Inc., for transfers to a janitorial business in which Matthew Rivera was a partner, and to purchase a condominium that, at one point, was occupied by a relative of Matthew Rivera.
- After the SEC’s investigation began, Matthew Rivera repaid to Robbins Lane a substantial portion of the funds that he withdrew, which were, in turn, repaid to investors.
The SEC’s complaint charges Daniel Rivera with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further charges Matthew Rivera and Robbins Lane with violating Sections 17(a)(1) and (3) of the Securities Act, Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. The complaint also names two companies controlled by Daniel Rivera, Daniel Rivera Inc. and Rivera & Associates (a/k/a Strategic Wealth Partners of New Jersey), as relief defendants.
Without admitting or denying the SEC’s charges, the defendants and relief defendants consented to entry of a final judgment permanently enjoining them from violating the provisions of the federal securities laws alleged to have been violated in the SEC’s complaint; ordering Daniel Rivera to pay disgorgement and prejudgment interest of more than $1.9 million and a $160,000 civil penalty; ordering Matthew Rivera to pay disgorgement and prejudgment interest of $20,013 and a $100,000 civil penalty; and holding Daniel Rivera Inc. and Rivera & Associates jointly and severally liable with Daniel Rivera for disgorgement and prejudgment interest of $482,029 and $109,459, respectively. The Court entered the final judgment on March 28, 2016.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.