Today, the San Juan federal court sentenced a man who caused millions of dollars in fraud losses to hundreds of people, mostly vulnerable residents, to 11 years and three months in prison.
As part of his sentence, convicted Carlos Maldonado Vargas will also have to pay $1,986,734.26 in compensation to 46 victims and serve five years of supervised release.
In 2019, a federal jury indicted Maldonado Vargas on 16 counts of bank fraud and insurance fraud.
Since then, Maldonado Vargas has been waiting to find out how much time he will spend behind bars as a punishment for taking advantage of the many people who loaned him money from his savings, compensation and inheritance, not knowing that they had been duped into a “pyramid scheme” or as it is known in English: a “Ponzi scheme”.
In fact, some of the victims were present at the hearing, before the federal judge John Woodcockof Maine County, but was assigned in this case in San Juan District Court.
At least 15 victims testified during the trial, as well as agents and an expert on Ponzi schemes, that Maldonado Vargas was working under the supervision of Business Planning Resources International (BPRIC).
According to prosecution documents in the case file, Maldonado Vargas used his education and background in the insurance industry “to reach the most vulnerable and safe victims through false promises of guaranteed high returns.”
The prosecution noted that it “have particularly benefited the elderly, widows who have just received a death insurance payment for their husbands, people looking to maximize their severance pay after layoffs, and people desperate to recover their losses from the financial crisis.”
“To constrain them, the defendant promised an astonishing return that did not follow a logical structure,” he added.
The indictment estimated that Maldonado Vargas raised more than $5 million through the scheme, while causing victims to lose more than $3.5 million.
Like other Ponzi schemes, the convict used the money he was receiving to pay some victims to give a “false impression of ‘success'” and thus lure more people into the trap.
In addition, “promoters” paid to get more victims, with the money collected used to pay for personal and family expenses, including school, travel, cars and store purchases.
At the same time, he sent the victims false account statements about “staggering profits” from non-revenue companies, the Federal Prosecutor’s Office explained.
What they didn’t know was that Maldonado Vargas owned or co-managed the so-called successful businesses such as Glorimar Fashions and Tailoring, LLC and Global Business Insurance Agency Inc. and Pet Card Systems Inc. and Datavos Corporation.
The scheme ran from 2007 until 2012, when the scheme’s financial problems and deception began to unfold.
“The Ponzi scheme worked. Investors believed that the defendant helped them secure their financial future. These satisfied clients would refer their family and friends to “grow their money,” too. But, as always with Ponzi schemes, Maldonado was ultimately unable to maintain a semblance of success.” .
When payments for sedatives stopped, victims began demanding their money back. Unable to keep his promises, in 2011, he moved to Florida. After he exploded after spending millions of dollars on victims, he kept pushing lies and looking for investors.”The prosecution added that he admitted to the federation that he offered Chinese, Brazilian and Obamacare bonds.
Although the charges exposed him to a maximum of 30 years in prison, prosecutors have since last year been calling for Maldonado Vega to be imprisoned for at least 15 years, due to the gravity of the charges and the consequences for the victims.
He also stated that the sentence cannot be reduced because it is the first time he has been criminally tried. The prosecution confirmed that it was well aware of the deception that was operating.
“As expected, most families and the victims’ mental health were forever marked. Many suffered a complete loss of their savings, had to postpone retirement and change their lifestyle. Many continue to suffer from the psychological effects of falling into the accused scheme and become depressed.”Prosecution office.
“Some families and relationships did not survive the coup. Other investors, affected by anxiety and depression, lost their will to live and could barely survive on their own.
Pyramid fraud is named after Charles PonziBorn in Italy, after trying his fortune in the United States and Canada, he developed a business selling International Postal Coupons in Boston. According to Investor.gov, an education site for the Securities and Exchange Commission, Ponzi has offered investors a 50% return, a benefit that was paid when other investors bought more coupons.