MIAMI — Federal authorities on Wednesday charged a prominent Miami businessman and his wife with running a Ponzi scheme that bilked $135 million from mostly elderly Cuban-American investors who were lured by the couple's credibility in the South Florida community and ties to religious and educational institutions.
In a statement, the Securities and Exchange Commission alleges that Gaston E. Cantens and Teresita Cantens, founders and co-owners of Royal West Properties Inc., a real estate development company, sold promissory notes to investors after acquiring various properties and later financing their sale.
The Cantens attracted investors by promising real estate investments with ``safe and secure'' annual returns between 9 and 16 percent. But when property owners defaulted on their mortgages, the Cantens used new investor money to repay earlier investors and pay Royal West's operating costs, the SEC alleges.
The Cantens also spent more than $20 million from investors to fund unrelated personal business ventures, pay themselves high salaries and divert money to their children and grandchildren, the SEC said.
Cantens' son and namesake, Gaston I. Cantens, is a former Florida state representative and current vice president at Florida Crystals Corp. He is not named in the SEC complaint.
SEC officials said the Cantens were not registered with the federal government to make securities offerings to investors.
``The Cantens used their prominent standing in a close-knit Cuban-American community to ruthlessly exploit vulnerable elderly investors who trusted them with their life savings,'' said Eric I. Bustillo, director of the SEC's Miami Regional Office.
Read the full story at MiamiHerald.com