NANUET, NY – A Nanuet resident defrauded Haitian community people over $ 2 million in a multi-year securities fraud that started with a day-trading Ponzi scheme and ended with a fast food franchise scam.
He also embezzled money from his employer in Rockland and Westchester, said Audrey Strauss, the US attorney for the Southern District of New York.
Rule Peter, 51, was convicted in Manhattan federal court on Thursday for securities fraud, wire fraud and structuring costs after a trial before Judge Sidney Stein.
Strauss said Pierre had lied “harshly” to investors for years.
“He told investors that their investment returns were excellent, when in fact he failed to invest investor funds as promised, made losses when he invested and embezzled a great deal. part of investor funds for personal use and to pay back investors the Ponzi scheme, ”Strauss said in an announcement.
From at least November 2016 to October 2019, Pierre solicited money from investors by falsely promising them that Ruless Pierre Consulting Group would earn 20% of his initial investment every 60 days through trading in shares. The contracts also promised that the investor could withdraw all funds from the investment with 30 days notice.
During the investment fraud scheme, Peter fraudulently obtained over $ 2 million from nearly 100 investors.
After receiving money from investors, Peter deposited the money in one of his personal bank accounts or RPCG bank accounts. He then transferred the money to trading accounts, where he engaged in unprofitable day trading.
Despite his trade losses, he repeatedly told investors, including in statements containing fictitious balances, that trading was profitable and their investments were growing as promised.
In addition to losing their money, he also used their funds to pay for personal expenses, including luxury vehicles. What’s more, he still hid the truth by using money obtained from new investors to make redemption payments to previous investors, Ponzi-style, Strauss said.
Beginning in November 2018, Pierre began offering investors, including some who were invested in his promissory note fraud, the ability to purchase stakes in a partnership as part of a partnership that would manage three franchises of fast food.
At the time, he didn’t own any of the fast food franchises, but he was in discussions to buy them.
Peter received financial statements for the franchise locations, which showed minimal profits.
Each victim received a document titled “Silent Partnership Agreement”. He promised investors a monthly return on investment of 5%, in addition to a 40% pro-rated share of quarterly gross operating profit. The minimum investment was $ 5,000.
The silent partnership agreements further provided that Pierre was responsible “for the complete management, control and policies relating to the operation and conduct of the business”.
In April 2019, Pierre bought a fast food franchise for around $ 50,000. He did not buy the other franchises.
He deposited fast food franchise investors’ money into bank accounts that mixed funds from franchise investment fraud with promissory note fraud. In Ponzi style, he fraudulently embezzled some of the investors’ money in the fast food franchise to reimburse investors in the promissory note fraud, Strauss said.
He raised at least $ 200,000 by selling the silent partnership deals to at least 18 investors. Some of the investors received their 5% monthly distribution, but the vast majority of investors were not cured. The fast food franchise ceased operations in December 2019.
In another ploy, Pierre embezzled money from his former employers. From 2007 to February 2016, he was Finance Director of two different hotels owned by the same company. One hotel was located in the Palissades, while the other was located in Armonk.
As Director of Finance, Pierre was the signatory of several bank accounts held on behalf of the management companies that operated the hotels.
After August 2018, Pierre no longer worked in either of the two hotels, but regularly made checks payable in cash to the bank accounts of the management companies. More specifically, from September 2018 to March 2019, Pierre issued more than 70 “cash” or “petty cash” checks from one of the Palisades hotel bank accounts, for more than $ 300,000.
In addition, from March 2017 to 2019, he deposited large sums of money into his personal bank accounts for amounts generally less than $ 10,000. The deposits were made at various banking institutions and usually took place on the same day, consecutive days or within a short period of time. For example, in just seven months, from June 2018 to December 2018, he deposited $ 225,612, via 138 cash deposits, all less than $ 10,000, into a bank account in the name of RPCG.
Pierre was convicted of two counts of securities fraud, each carrying a maximum sentence of 20 years in prison, one count of wire fraud, carrying a maximum sentence of 20 years in prison, and a head of structuring, which carries a maximum penalty of five years in prison. The potential maximum sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any conviction of the defendant will be determined by the judge.
He is expected to be sentenced on September 9, 2021.