‘Better than a 401(k)’? Scammer blew through more than $5 million of investors’ money earmarked for retirement

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According to the Securities and Exchange Commission, Marco “Sully” Perez of Midland, Texas, used to tell his clients that his investment plan was better than a 401(k).

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Now the US District Court in West Texas has ordered the entire operation to be halted and any remaining assets to be confiscated. seconds They say The investment scheme was a “sham” and a Ponzi scheme. The SEC says Perez blew his investors’ retirement millions of dollars high on the hog, and most of the money was gone. This included more than $1 million spent on new cars, $300,000 on jewelry, $450,000 flying on private airplanes, and $110,000 to hold their wedding reception on the Queen Mary cruise ship. All over a period of just over three years.

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During that time, Perez gambled more than $200,000 in casinos, made cash withdrawals totaling more than $600,000, and spent huge sums on everything from a helicopter to the Dallas Cowboys, the SEC says. .

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Total perceived spree per day including Sunday was approximately $5.6 million, or more than $4,400. The SEC says it was about two-thirds of the money invested with them.

The SEC said Permian Basin Propants Inc., a company that Perez controls as chairman and carried out the plan, was also charged.

Meanwhile, the commission’s report, the whole scheme was bogus. “The Permian was and is a sham,” and “had little legitimate revenue,” the commission says. “Indeed, Perez and Permian used most of the investor funds for Perez’s personal gain, to make Ponzi payments to investors,” and for non-commercial purposes, it says.
And if the SEC is correct, 265 typical investors will on average lose as much as $35,000 of their retirement funds.

Perez’s attorney, Arnold Spencer of Dallas, tells Businesshala: “Mr. Perez intends to defend himself against the allegations in the lawsuit. But more importantly, he wants the SEC to protect the interests of investors and the company.” and want to work with its investors.”

Whatever it may be, we believe that investors can forget their immediate dreams of a quick and easy retirement.

Along the way, investors ignored a long list of key warning signs, the SEC says.
from them:
1. Expected low-risk investment returns promised. The SEC says that Perez promised a return on investment of up to 30% with no risk. This is at a time when even players like Goldman Sachs and Warren Buffett could not average better than around 12% – with a lot of risk. perez even Guarantee According to the SEC’s report, individual investors deliver 10% to 100% returns within 30 to 90 days.

2. Suspicious business dealings. Perez reportedly guaranteed an additional 20% return to some investors. If only they would post a great review of them and their investment operations on the Better Business Bureau website.

3. Things that didn’t make sense. Perez reportedly told investors that his business always carries enough cash to pay all of its investors — raising the obvious question of whether this surprisingly lucrative operation, flush with cash, even Why are external investors even needed?

4. Artificial methods to prevent investors from withdrawing their money. The Permian reportedly had a 366-day lockup on the fund. And, the SEC says, when some investors tried to withdraw their money, Perez told them the SEC would not let them.

5. Affinity Marketing. Perez, a veteran of the US Navy, specifically marketed his plan to other veterans as well as active military personnel. He made his very clear “Military to Millionaire” story. Affinity marketing isn’t always a warning sign, but it is so common in investment fraud that The SEC Actually Has a Warning Letter on this subject.

Okay, so for seasoned and knowledgeable investors, some of these perceived red flags are so obvious they’ll be deserving of immediate Bronx cheer. But many, perhaps most people, are relatively inexperienced when it comes to investing. And why shouldn’t they? The subject matter can be very complex, investment products can be mysterious and opaque, and financial education is either basic or non-existent.

Cases like this again raise a simple, obvious question: wouldn’t it just be cheaper if we taught people more about this stuff while they were still in school?

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