The Securities and Exchange Commission (“SEC”) has charged an Internet-based investment company, Imperia Invest IBC (“Imperia”), with securities fraud for soliciting several million dollars from U.S. investors and promising guaranteed annual returns in excess of 1.2% per day while in reality siphoning the funds into foreign bank accounts and not paying any money back to investors. The SEC has obtained an emergency court order freezing the assets of Imperia which allegedly raised more than $7 million from approximately 14,000 investors worldwide. More than half of the funds were collected from U.S. investors who are Deaf. Imperia purported to invest in Traded Endowment Policies, the British term for viatical settlements, and claimed to pay returns of 1.2% per day. Imperia’s website stated that investors could only access their profits by purchasing a Visa debit card from Imperia for a few hundred dollars. However, Imperia has no relationship with Visa and was using the Visa name without authorization. Imperia allegedly required investors to provide funds to Imperia through three PayPal-type entities located in Costa Rica, Panama, and the British Virgin Islands. Once the funds were received from investors, Imperia apparently funneled these amounts and additional investor funds to bank accounts located in Cyprus and New Zealand. Meanwhile, investors never received any returns.
Imperia is not registered with the SEC. Imperia is not registered as an investment advisor or broker-dealer in any state. The staff of the SEC has also received credible information suggesting that Imperia, which has made claims to be licensed and located in both the Bahamas and Vanuatu, is not licensed to do business or located at either of those locations. On April 20, 2009 the Securities Commission of the Bahamas issued a Public Notice indicating that Imperia was holding itself out as being located at a certain address in the Bahamas, while there was no company named Imperia operating from that address, and that Imperia is not registered with the Securities Commission of the Bahamas. The Public Notice stated that any registrable activity conducted by Imperia would be a violation of the Bahamian Securities Industry Act. Please see the Public Notice for more detail at http://www.scb.gov.bs/notices.htm.
The SEC wishes to remind investors that investment pitches offering spectacular rates of return are an indicator of possible investment fraud. The SEC encourages investors to take steps to determine whether the investment is legitimate and complies with the law.
Investors are encouraged to refer to the SEC’s link regarding signs of prime bank and banking-related investment frauds for more information on how to identify such fraud. Below are some warning signs of fraudulent bank-related investment schemes:
Excessive Guaranteed Returns
These fraudulent investment pitches typically offer or guarantee spectacular returns of 20 to 200 percent monthly, absolutely risk free. Promises of unrealistic returns at no risk are hallmarks of banking-related investment fraud.
Claims of Inordinate Complexity
Investment pitches frequently are vague about who is involved in the transaction or where the money is going. Promoters may try to explain away this lack of specificity by stating that the financial instruments are too technical or complex for non-experts to understand.
Investors are encouraged to review the SEC publication “Ask Questions” and other SEC publications located at http://www.sec.gov/investor.shtml before making any investment. Some questions investors may consider asking include:
- Does it sound too good to be true? If it sounds too good to be true, it (probably) is.
- Is this investment product registered with the SEC and my state securities agency? Where can I get more information about this investment? Can I get the latest reports filed by the company with the SEC: a prospectus or offering circular, or the latest annual report and financial statements?
- Are you registered with our state securities regulator? Have you ever been disciplined by the SEC, a state regulator, or other organization (such as the Financial Industry Regulatory Authority (FINRA) or one of the stock exchanges)?
The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.