Orlando man accused of squandering millions of dollars belonging to Puerto Rican city
ORLANDO, Fla. - An Orlando man is accused of squandering millions of dollars belonging to a city in Puerto Rico.
FOX 35 discovered the Securities and Exchange Commission charged Eugenio Garcia Jimenez, Jr., an unregistered investment adviser for defrauding the municipality of Mayagüez, PR. Garcia is said to misappropriated $7.1 million in taxpayer money.
In a release, the SEC claims Garcia told city officials he could invest around $9 million without risk to the principal balance and earn around 10 percent in annual returns. The SEC’s complaint states the city was planning to use the return on investment to fund city projects like building a new trauma center.
The complaint also points toward Garcia forging documents in order to persuade officials to trust him with the large amount of money. The SEC investigation shows Garcia spent more than $7 million dollars in a period of six months.
In an exclusive interview with FOX 35, the former Chief of the Securities and Exchange Commission, Lisa Bragança, says even government entities can fall into scams.
“According to the SEC complaint, not one but two brokerage firms permitted this investment adviser to improperly handle and outright steal a total of $9 million from the people of Mayagüez. When the first brokerage firm detected suspicious activity and shut down the account, the adviser opened an account and moved the remaining funds to another brokerage firm. It is hard to see how this could have happened if these two firms had fulfilled the duty of every brokerage firm to ‘know your customer’.” Bragança explained.
“As alleged, Garcia took advantage of that trust and misappropriated millions of dollars of taxpayer funds, causing the municipality great harm.” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.
The SEC’s complaint, filed in federal court in Puerto Rico, charges Garcia with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains plus prejudgment interest and a civil penalty.