George Theodule, formerly of Wellington, Florida, was sentenced for orchestrating a Ponzi-like affinity fraud scheme on fellow Haitians residing in the United States. In October 2013, Theodule agreed to plead guilty to one count of wire fraud in exchange for the government dropping the other 39 charges against him.
According to the indictment, Theodule solicited individuals in the Haitian community, primarily in South Florida, to invest with his companies, Creative Capital Consortium and A Creative Capital Concepts. Theodule allegedly told investors that he could double their money in 90 days by trading in stock options. Theodule allegedly preyed on members of the Haitian community in a classic affinity fraud.
An affinity fraud is an investment scam that targets members of identifiable groups, such as religious or ethnic communities. Oftentimes, the fraudsters are members of the group. They typically enlist respected members of the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthwhile.
The Federal Bureau of Investigation claims that, between 2007 and 2008, Theodule convinced thousands of investors, residing primarily in South Florida, to invest with his companies. According to the Palm Beach Post, of the approximately $68 million that was invested, Theodule invested about $18 million in stock options and lost it all. The remaining funds were allegedly used to repay earlier investors to create the appearance of investment success in Ponzi-like fashion. The government claims that the remaining funds were used by Theodule for his own personal benefit.
At his sentencing hearing, U.S. District Judge Kenneth Marra sentenced Theodule to 150 months in prison. A separate hearing concerning restitution is scheduled.
The court-appointed trustee, Jonathan Perlman, has indicated that any restitution order against Theodule will likely be worthless as Theodule is either broke or has successfully hidden the illicit proceeds from the fraud scheme. As such, Perlman has asked the 11th Circuit Court of Appeals to find that Bank of America and Wells Fargo were complicit in Theodule’s scheme. If the appellate court agrees, Perlman indicated he may be able to recover some money for the victims from the banks.
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