The Securities and Exchange Commission has charged two brothers with orchestrating a $2.7 million Ponzi scheme targeting unsophisticated elderly investors.
Daniel Rivera, a New York resident with an office in New Jersey, told investors from 2008 to 2014 they would profit in a Pennsylvania real-estate venture called Robbins Lane,
the SEC said Wednesday. He sometimes recommended they sell their retirement assets in order to invest in the venture, which had no operations, according the agency's complaint filed in a federal court in New Jersey.
As part of his scheme, he created a Robbins Lane website, as well as a brochure advertising an opportunity that gave “the senior investor a guaranteed monthly income,” the SEC said. Mr. Rivera used the money for personal expenses, including sporting event tickets and his daughter's college tuition, while transferring some of the funds to a janitorial business in which his brother Matthew Rivera was a partner.
Robbins Lane, founded by the brothers to purportedly buy, develop and sell real-estate, had no investment portfolio and no ability to provide any income at all to the seniors. "Instead of investing in real estate, hundreds of thousands of dollars of investor funds were used to pay other investors," the SEC said in its complaint.
The brothers neither admitted nor denied the SEC's charges, according to the agency's statement. Daniel Rivera was ordered to pay more than $1.9 million plus a $160,000 civil penalty; his brother, a Pennsylvania resident, was ordered to repay about $20,000 and a $100,000 civil penalty; Daniel Rivera Inc. and Rivera & Associates, two companies controlled by Daniel Rivera, were held liable for about $591,000, the statement shows.
