A Winter Gardens, Fla., man promised investors a “gold mine” of opportunity but instead stole at least $6 million from them to buy luxury cars and other items, according to an SEC complaint released Thursday.
The agency has charged DFRF Enterprises and its founder with fraud, alleging the firm operated a Ponzi scheme to swindle members of the Spanish and Portuguese communities in Massachusetts and Florida. The SEC has frozen the company’s assets.
DFRF Enterprises, named for founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, says the SEC, even though the company’s revenues came solely from selling membership interests to investors and not from actually mining gold.
With the help of several promoters, Filho lured investors by falsely promising their money would be fully insured. He also said DFRF had a line of credit with a Swiss private bank and that one-quarter of the company’s profits would be used for charitable work in Africa.
The scheme raised more than $15 million from at least 1,400 investors as members were recruited in pyramid scheme fashion to keep the fraud afloat and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts, the SEC says.
The SEC further alleges that Filho has withdrawn more than $6 million of investor funds to buy a fleet of luxury cars and for other personal expenses.
“DFRF and its operators falsely claimed that they were running a lucrative gold mining business when in reality they were operating a Ponzi and pyramid scheme that preyed on investors in particular ethnic communities who stand to lose millions of dollars,” said John T. Dugan, associate regional director of the SEC’s Boston regional office. “Investors were not given the full story about the true value and security of their investments.”
According to the complaint filed in federal district court in Boston, Filho, a native of Brazil, orchestrated the scheme with assistance from six promoters who are also charged in the case: Wanderley M. Dalman of Revere, Mass.; Gaspar C. Jesus of Malden, Mass.; Eduardo N. Da Silva of Orlando, Fla.; Heriberto C. Perez Valdes of Miami; Jeffrey A. Feldman of Boca Raton, Fla.; and Romildo Da Cunha of Brazil.