Texas Man Charged with Scamming Investors Out of $14M in Ponzi Scheme

November 3, 2020 Author: Brian Levin

San Antonio Businessman Charged with Defrauding Retired Police Investors

The U.S. Securities and Exchange Commission (SEC) announced charges against San Antonio-area businessman Victor Lee Farias and his company, Integrity Aviation & Leasing (“IAL”). According to the SEC’s complaint, Farias ran a Ponzi-like scheme that defrauded investors out of $14 million. Many of the investors were officers who had retired from the San Antonio Police Department and other first responders.

The elaborate scheme involved promising investors that IAL would use funds raised from investors to “purchase engines and other aircraft parts for leasing to major airlines.” Unfortunately, many of the retired investors withdrew funds from their retirement account to invest in the self-directed individual retirement account (self-directed IRA). Despite the promise to pay interest quarterly at a 10–12% annual rate of return, IAL failed to deliver. 

The SEC alleges that Farias not only misrepresented “many facets of the offering,” but that he also misappropriated investor funds for personal gain. Nearly half ($6.5 million) of the initial $14 million raised was used to make “bogus, interest payments back to investors.”

Another $2.7 million was used without authorization to finance the construction of a friend’s gas station and convenience store. At least $2.4 million was misused for personal gain, including $800,000 for meals, entertainment, and other luxury purchases. Finally, undisclosed sales commissions of nearly $1 million were paid to IAL’s salespeople.

In total, an estimated 88 investors across five states invested millions with Farias and IAL, resulting in significant losses.  

 

Risks Associated with Self-Directed IRAs

The SEC had previously warned against the use of self-directed IRAs and the potential for fraud. The investor alert issued in 2018 advised investors that self-directed IRAs could be prone to “fraudulent schemes, high fees and volatile performance” compared with other types of IRAs. Self-directed IRAs can involve alternative assets that can have a high degree of risk. Self-directed IRAs may not provide adequate disclosure regarding the underlying asset or financial information.

 

Contact Levin Law for a Free Consultation

If you invested in Integrity Aviation & Leasing or another Ponzi-like scheme, you might be entitled to compensation for your losses. Levin Law managing partner Brian Levin has helped investors recover losses related to Ponzi and Pyramid fraud schemes throughout the country. Contact Levin Law today at (305) 402-9050 or email contact@levinlawpa.com to determine if you were the victim of a Ponzi-scheme and how we can help. 

Our attorneys are experienced litigators who have helped investors recover millions in verdicts and settlements. Most cases are accepted on a contingency fee basis, meaning you are not obligated to pay Levin Law attorney fees unless money is recovered.

 

About Levin Law

Levin Law is a premier national securities and class action law firm with significant experience.  Brian Levin, Levin Law’s founding attorney, has helped recover approximately $100,000,000 through securities arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.  

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